29th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Justin O’Byrne) took the chair at 1 1 a.m., and read prayers.
– I present the following petition from 42 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:
That an Omega navigation station in Australia would be an integral part of the United States nuclear weapons delivery systems.
That Australian collaboration in such a navigation facility would endanger the people and negate any Australian initiatives towards nuclear disarmament, nuclear free zones and the non-proliferation of nuclear weapons. Your petitioners therefore humbly pray that the government will take all steps to acquaint the people with the dangers of nuclear warfare and to work internationally for nuclear disarmament and that it will refuse to diminish Australia’s independence and standing through the construction of an Omega station in Australia.
And your petitioners as in duty bound will ever pray.
Petition received and read.
– I present the following petition from 107 citizens of Australia:
To the Honourable the President and Senators in Parliament assembled: The humble petition of undersigned citizens of Australia respectfully showeth that the establishment of an Australian Government Insurance Office will:
1 ) Lead to Nationalisation of the Insurance Industry.
Have a serious effect on the private sector of the economy.
Cause unemployment in the Insurance Industry.
Your petitioners therefore humbly pray that the Senate rejects completely the Australian Government Insurance Office Bill 1975.
And your petitioners as in duty bound will ever pray.
Petition received and read.
– I present the following petition from 13 citizens of Australia:
To the Honourable President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That present and proposed development of limestone mining at Precipitous Bluff, tin mining at Cox Bight, woodchipping in the remaining native forests and damming of South West rivers to produce power, will significantly affect the wilderness quality of South West Tasmania necessitating extensive road systems and damaging irreparably one of the last great wilderness areas of the world.
Your petitioners therefore humbly pray that the Senate will protect this national heritage by refusing Australian Government financial assistance to any project which will further alienate this wilderness.
And your petitioners as in duty bound will ever pray.
Petition received and read.
– I present the following petition from 3 1 4 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled: The humble petition of the undersigned citizens of Australia respectfully showeth:
1 ) That Parliament should reject the Bill currently before it to establish an Australian Government Insurance Office.
) That while there is a need to establish in Australia u Natural Disaster Fund to provide compensation for property damage and other losses resulting from disasters such as earthquakes, floods and cyclones, such a Fund can be established, as in other countries, using the medium of the existing private enterprise insurance offices.
That a plan for such a Fund was submitted to the Treasury in October 1 974.
That no reasons for the establishment of an Australian Government Insurance Office (other than the desire to provide non-commercial disaster insurance and Australian Government competition with private enterprise) have been given by the Government.
That there is already intense competition between the existing 45 life assurance offices and between over 260 general insurance companies now operating in Australia, and that further competition from a Government Office would only be harmful.
That the Insurance Industry is already faced with
the effects of inflation,
b ) increased taxation on life assurance offices,
the effects of recent natural disasters,
other legislative measures already in train or in prospect by the Government, e.g. the National Compensation Bill, National Superannuation Plan.
That as taxpayers your petitioners are greatly concerned at the huge costs (far more than the $2m initial capital and loan funds which it is proposed will be allocated ) of establishing an Australian Government Insurance Office.
Your petitioners therefore humbly pray that the House will reject the Bill.
And your petitioners as in duty bound will ever pray.
-Mr President, as the petition exceeds 250 words in length and I should like it to be read, I ask that leave be given for the petition to be read by the Clerk.
-Is leave granted? There being no dissent, leave is granted.
Petition received and read.
– I present the following petition from 9 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:
1 ) That Parliament should reject the Bill currently before it to establish an Australian Government Insurance Office.
That while there is a need to establish in Australia a Natural Disaster Fund to provide compensation for property damage and other losses resulting from disasters such as earthquakes, floods and cyclones, such a Fund can be established, as in other countries, using the medium of the existing private enterprise insurance offices.
That a plan for such a Fund was submitted to the Treasury in October 1 974.
That no reasons for the establishment of an Australian Government Insurance Office (other than the desire to provide non-commercial disaster insurance and Australian Government competition with private enterprise) have been given by the Government.
That there is already intense competition between the existing 45 life assurance offices and between over 260 general insurance companies now operating in Australia, and that further competition from a Government Office would only be harmful.
That the insurance industry is already faced with
a ) the effects of inflation,
b) increased taxation on life assurance offices,
the effects of recent natural disasters,
other legislative measures already in train or in prospect by the Government, e.g. the National Compensation Bill, National Superannuation Plan.
That as taxpayers your petitioners are greatly concerned at the huge costs (far more than the $2 million initial capital and loan funds which it is proposed will be allocated) of establishing an Australian Government Insurance Office.
Your petitioners therefore humbly pray that the House will reject the Bill.
And your petitioners as in duty bound will ever pray.
-I present the following petition from 1 7 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth:
1 ) That Parliament should pass the Bill currently before it to establish an Australian Government Insurance Corporation.
That an Australian Government Insurance Corporation will benefit all Australian women and men by offering equal opportunity for employment and insurance cover.
That there is a need to establish in Australia National Interest Insurance so that cover is available against natural disasters.
That the Australian Government Insurance Corporation will fairly compete with the general and life insurance companies thereby benefiting the industry and the policy holders.
Your petitioners therefore humbly pray that the House will pass the Bill.
And your petitioners as in duty bound will ever pray.
Petition received and read.
– I present the following petition from 149 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The humble Petition of the undersigned citizens of Australia respectfully showeth: ( I )That Parliament should pass the Bill currently before it to establish an Australian Insurance Corporation.
That an Australian Government Insurance Corporation will benefit all Australian women and men by offering equal opportunity for employment and insurance cover.
That there is a need to establish in Australia National Interest Insurance so that cover is available against natural disasters.
That the Australian Government Insurance Corporation will compete fairly with the general and life insurance companies thereby benefiting the industry and the policy holders.
Your petitioners therefore humbly pray that the House will pass the Bill without further delay.
And your petitioners as in duty bound will ever pray.
-I present the following petition from 465 citizens of Australia:
To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
We wish to register our strongest protest against the establishment of the Australian Government Insurance Corporation, and the introduction of the National Compensation Bill, as proposed by the Federal Government.
We believe that the intended legislation represents a grave threat to the concept of a free Australian society, based on a prosperous free-enterprise system, because:
It will divert vast amounts of funds from the private to the public sector, Government control and administration,
It will provide unequal competition, and thereby threaten the existence of the free enterprise insurance industry which already suffers from high inflation and increased taxation,
It promises a range of over-generous benefits cither free* or at low cost, to be subsidised from consolidated revenue, and will therefore rapidly become an unbearable burden on the Australian taxpayer.
And your petitioners as in duty bound will ever pray.
Petition received and read.
– The following petitions have been lodged for presentation:
To the Honourable the President and Members of the Senate in Parliament assembled. The !: humble Petition of the undersigned citizens of Australia respectfully sheweth:
Your petitioners therefore humbly pray that the House will pass the Bill without further delay.
And your petitioners as in duty bound will ever pray. by Senator Coleman.
To the Honourable the President and Members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of Australia respectfully showeth:
That the insurance industry is already faced with
Your petitioners therefore humbly pray that the House will reject the Bill.
And your petitioners as in duty bound will ever pray. by Senator Bunton.
MR F. P. McMANUS
– I draw the attention of honourable senators to the presence in the Gallery of former Senator Frank McManus. This is the first occasion on which he has visited the Senate since his retirement and on behalf of honourable senators I extend a welcome to him.
-Is the Minister for Labor and Immigration aware that the President of the Australian Labor Party, Mr Hawke, believes that the possibility of higher unemployment in Australia is implicit in the Budget brought down last night? Does the Minister agree with Mr Hawke that unemployment in Australia could reach 500 000? Finally, what future is there for the thousands of young people who will leave school at the end of this year and who will be faced with the likelihood of unemployment because of the policies of the current Government?
– I am not as aware as the honourable senator is of the latest lucubrations of Mr Hawke.
– What was that word again?
– Lucubrations. Look it up. I am aware, however, that in a confrontation on television last night between Mr Hawke and the putative alternative leader of this country, Mr Fraser, and his putative Treasurer, Mr Lynch, Mr Hawke made an unholy mess of those would-be leaders of our country and left them with their mouths hanging open and obviously showing to the country that they had no alternative propositions to offer to those that were offered in the Budget last night. Mr Hawke is welcome to his opinion that there may be half a million unemployed. Perhaps that is possible. There is a great uncertainty still hanging over our economy. We are attempting to do something about it. I suggest that anybody who saw Mr Hawke, Mr Fraser and Mr Lynch on television last night could be left with only one conclusion, and that is that we are attempting to solve the problem and the Opposition is totally bereft of ideas.
– My question is directed to the Minister representing the Minister for Transport. Now that the proving flights of the Concorde have been completed, is it likely that approval will be given for the Concorde to fly on the London-Australia run?
– All I can say is that as a result of the 7 proving flights a great deal of technical data has been supplied to the Minister for Transport and the other Ministers concerned.It is understood that the environmental impact statement- that is, the firm one- will be available in October, and when that is available comments from all who are interested will be invited. After consideration of those comments a decision will be made.
– I ask the Minister for Agriculture: Has the Labor Government intentionally reduced agriculture to a minor portfolio? Is this not the logical conclusion following the Budget’s 47 per cent slash in rural assistance at a time when thousands of farmers are in a desperate plight?
– I hope that agriculture is not being downgraded. If it were, I would feel that there was some personal reflection on me. I am surprised that Senator Webster has not done his homework as thoroughly as he might have done. Even a superficial look at the expenditure on agriculture this year would reveal that it takes into account the very important element of the floor price expenditure on wool last financial year. If Senator Webster is not aware of the difference that that makes, quite evidently he is not capable of reading clearly the statement that the Treasurer put down last night. The great bulk of that money, of course, was provided during the last financial year for the support scheme for wool.
This year, as has been pointed out in the Treasurer’s speech, an additional amount of $ 1 50m is provided for, approximately $70m of which will be got under guarantee from private sources; the balance is provided for in the Budget. But there is a large difference between that amount and the amount required last year. That, of course, is now reflected in what appears to be a reduced amount for agriculture this year. Also the remaining amount of the superphosphate bounty, which I think was about $37m and which does not appear in the figures for this year. In fact, with those 2 factors and also the remainder of the dairy bounty, taken into account, the amounts being paid to agriculture this year have actually increased over last year. All the essential services and assistance to agriculture are being maintained.
– Can the Minister for Police and Customs advise the Senate whether subsidies paid under the Nitrogenous Fertiliser Subsidy Act are in fact paid if the goods concerned are to exported? Does the Minister have knowledge of any fertilisers covered by that Act which have been exported after the payment of a subsidy? Finally, can the Minister advise the Senate of the names of any companies and directors involved in this practice and whether the subsidies concerned have been reclaimed?
– Having been notified by the honourable senator of his intention to ask this question, I had a report prepared by my Department on the question as it necessitated looking up the names of firms to which subsidies had been paid. My notes state that the Nitrogenous Fertiliser Subsidy Act was introduced in August 1966 and that a subsidy rate of $78.74 per tonne of contained nitrogen is applicable. Urea is a nitrogenous fertiliser containing 46 per cent of nitrogen and a subsidy rate of $36.22 per tonne is payable. Subsidy is not payable if the goods are to be exported. In the March quarter of this year high world prices, due to a world production shortfall, made the export of urea an attractive financial proposition. The situation has now changed and overseas supplies are readily available.
My Department undertook inquiries in February and March this year to determine whether subsidies had been paid on any urea which had been exported. One company was involved in the export of urea, namely, Primary Export of Australia Pty Ltd. The shareholders and directors of that company are Mr John Lee O ‘Rourke and Mr John Francis Lamprell. As far as I am aware that company purchased the urea in small quantities from the Murrumbidgee Irrigation District Farmers Co-operative Society Limited or from growers supplied by the cooperative. Mr David Neve is the managing director of the Murrumbidgee Irrigation District Farmers Co-operative Society Limited, while Mr Graham Blight is a director. The subsidy amounts recovered from Primary Export Pty Ltd were $80,020 on 2209 tonnes of urea purchased through the Murrumbidgee Co-operative and from growers and $51,387 on 1418 tonnes purchased elsewhere. In March 1975 the then Minister announced that action had been taken to prohibit the export of urea without the prior approval of the Minister for Agriculture. Finally, I think the following 2 facts should be stressed: The persons concerned were rewarded handsomely for their export venture; and I believe there is in Australia today a shortage of urea which will affect current rice crops.
– Would the Minister for Social Security advise the Senate whether there is any evidence to support any suggestion that there is an abuse of Medibank by either doctors or patients?
-There does not appear to be any evidence- I have none available- of any substantial abuse of Medibank either by doctors or patients. Obviously one hears of various instances which one probably could describe as an abuse, but there has been nothing of a substantial nature. It is difficult to tell whether there have been abuses because accurate statistics are not available as to the volume of claims which were made under the previous medical scheme by medical practitioners which could be compared with the volume of claims which are being made under Medibank. It does seem that some doctors are making claims more frequently than they did under the previous medical schemes and this is imposing some heavy clerical burdens on some of the offices of the Health Insurance Commission. I should not like to say whether this is deliberate or not.
– Some would.
-Maybe some would like to say it is deliberate but I should not like to say whether it is or it is not. However, it does appear to be happening. Despite the growing pains which one can expect in the first month or 2 months of the operation of a new system such as Medibank, it is operating remarkably well. There are safeguards which can be exercised to ensure that there are not abuses and the Health Insurance Commission and the Department of Social Security are constantly watching the situation. I think we can all be very happy- the Government indeed can be very happy- that so far the operations of Medibank have proved to have functioned so successfully.
– I direct my question to the Minister representing the Minister for Manufacturing Industry. I preface it by saying that no doubt the Minister has seen reports that two of Tasmania ‘s most important industries and two of the biggest employers in that State namely, the Associated Pulp and Paper Mills Ltd and the Electrolytic Zinc Company of Australasia Ltd, are again looking at large scale retrenchments. Would the Minister outline to the Senate what action is being taken by the Government to assist these industries and to protect their workers from retrenchment? Would the Minister outline also any tariff changes that may be contemplated to protect APPM from import competition?
– In earlier and happier times when I was the Minister for Manufacturing Industry, before I took up my present cross, I had something to do with both of these companies. Of course, what the Government did to provide rather exceptional types of assistance to both of these companies was strongly criticised at the time by the Opposition. In fact, it was suggested that the handouts- as they were called- which the Government gave to both of these companies to keep them in being and to avert retrenchments somehow or other constituted some sort of a dereliction of duty and some sort of fiscal irresponsibility. I take it that Senator Townley was never associated with those strictures on the Government and that as a loyal Tasmanian he approved of what was called porkbarrelling’ on the part of the Government. Both Associated Pulp and Paper Mills Ltd and Electrolytic Zinc Company of Australia Ltd are once more in difficulties because of general economic conditions. I notice that Senator Wright has something to say on this subject too.
– Answer the question.
-Perhaps a little later he will favour us with his views on the matter also. In any event, the Government is examining the situation of these companies once again but no immediate tariff measures are in mind. Of course, we would not contemplate repeating the measures that were taken last year, largely because we know that we would have to face such an angry Opposition. However, we are examining the matter closely and if the honourable senator will be patient, I will let him have a detailed answer to his question.
– I direct a question to the Minister for Labor and Immigration. In view of the precarious balance outlined last night by the Treasurer in that he is predicting an increase of 22 per cent in the average male weekly earnings for this financial year, I ask: What measures are the Minister and the Government taking to support private employers who are expected to resist over-award claims for increased wages in view of the Government’s proclaimed support for wage indexation?
– If the honourable senator has been following Press reports with the closeness with which I know he usually follows the major events of the day, he will have observed that the Government has been more active in defence of wage indexation than I think could be said of any previous government in relation to wages policy. We have intervened in the national wage case before the Conciliation and Arbitration Commission. We have intervened in cases before the Public Service Arbitrator. I personally have entered the lion’s den in various trades hall councils. I have gone to summit meetings of many of the more militant unions. 1 have put my head on the chopping block in an attempt to persuade unions that it is in their own interests to temper their wage demands over the period immediately ahead. I can assure the honourable senator that the overall strategy of this Government involves a continuing effort to prop up the decision of the Conciliation and Arbitration Commission in support of wage indexation.
I would suggest that while the taxation measures which were announced in the Budget last night do not go to the extent of tax indexation which was desired by the unions, they do at least give relief to those on lower and middle incomes of a nature which is most likely to make wage indexation more acceptable. We are fully conscious of the difficulties of the private sector. We are attempting to do something about them. Part of our strategy is to do everything that we can to keep wage increases over the period ahead within reasonable limits. I have also had the benefit over the last week or so of studying a vague, ambiguous and confused document known as the Liberal Party’s new industrial policy, but 1 looked in vain through all of the pages of that document for any guidance as to what our opponents would do to solve this problem which we have grasped.
– I direct a question to the Minister for Agriculture. This week has seen the opening of the new wool selling season. Has the Minister any information about price prospects at wool auctions?
– The wool sales resumed yesterday and it was a very important day, of course, for the Australian wool industry. The trading for the day reflected a price of 5c a kilo above the floor price, with the Australian Wool Corporation buying in about 20 per cent of offerings. It is customary on the first day of selling at this time of the year for the market to be somewhat sluggish. We feel that the results were reasonable in the circumstances. The prospects remain reasonably good. There is undoubtedly a need for more greasy wool on the overseas markets at the present time. I would anticipate that with the proper supply management arrangements of the Corporation we will see a relatively strong market maintained throughout the forthcoming season.
– My question, which is directed to the Minister for Labor and Immigration, is based upon the reported attitude of the Government to the wage indexation case about which he is so proud. Is it correct that the Government proposes to fiddle with the consumer price index so as to remove from that index items in respect of which some of the greatest price or charges increases connected with the Government’s policy have occurred? If so, would this not be a fraud or deception designed to secure agreeable increases in wages? Would it not be a fraud or deception because it would exclude from consideration some of the greatest price increases thereby denying the rights of wage earners who would rely upon indexation and also denying to the public a reliable measure of price increase? Will the Minister explain this deception or otherwise clarify the position?
-Senator Greenwood should be a little more careful in attempting to score political points. If he were he would not have asked that question. I am sure that if he went to a lot of the people who support his Party he would find that what was mentioned by the Treasurer last night has been advocated by employer organisations for many years. In fact that is one of the most serious criticisms that Mr Hayden and I have to face within our own ranks, but I bite on that bullet and I will attempt to answer the honourable senator’s question. There is a strong view that indirect taxation of the kind that was introduced last night or government charges are forms of redistribution of income. They are in fact imposed in order to finance government services. It is argued by certain economists that that having been done it should not then be counted again as a benefit in the consumer price index when workers are seeking increases in wages. I notice that Senator Withers laughs, but this view has very respectable backing in circles for which he would normally, I would think, have some regard.
– Not from Mr Hawke this morning.
– I agree, Senator Carrick, that this is a proposition which will strike considerable opposition in the ranks of the Labor Party and among unions. I am surprised at the attitude of the Opposition. We have entered an era when we as a government may have to consider matters which are unpopular even in our own ranks. If we are to be heckled from the other side of the House for what would normally be considered a responsible approach to government we will just have to bear with that too. I suggest to Senator Greenwood that he go back to some of the employer organisations that have been putting submissions to the national wage case and he will find that there is surprisingly respectable backing for the proposition that was put by Mr Hayden last night.
– Is the Minister for Repatriation and Compensation aware of the continuing concern of veterans organisations for the future of the repatriation system? What is the position in this regard? Has the Minister taken any steps to inform veterans organisations of the real position?
-A similar question was asked on this matter by Senator Scott yesterday. I am aware that there is concern about the future of the repatriation system. The answer which I gave to him then and which I think is sufficiently important to repeat at least in part, is that this is a concern which has been expressed by veterans organisations over the past 5 or 6 years. I think the concern to any serious extent began initially when a Senate committee which was chaired by the then Senator Dame Nancy Buttfield brought down a recommendation which suggested substantial changes in the repatriation system. Shortly after that the previous Government appointed Mr Justice Toose to make his inquiry into the repatriation system and this seemed to cause some additional concern. The fact that the new Department of Repatriation and Compensation was created added to that concern and the fact that I now have the portfolios of Social Security and Repatriation and Compensation I think has probably also added to this concern.
I have repeatedly told the veterans organisations and in particular the Returned Services League- it is only a week or two since I had a very long talk with Mr Keys, the National Secretary of the RSL- that we do not have any intention of changing the fundamentals of the repatriation system. An inquiry is being conducted into the Public Service by a royal commission presided over by Dr Coombs. A special task force is dealing with the rationalisation of the social welfare systems generally of which repatriation is a part. No particular emphasis is being placed in that inquiry on the future of repatriation. The principal inquiry into repatriation is that which is being undertaken and has been undertaken for the past years by Mr Justice Toose. I have undertaken to the RSL and to other veterans organisations that when I receive
Mr Justice Toose ‘s report, which I hope to receive within the next couple of months, I will make it available to all of the veterans organisations and they will have at least 6 months to consider Mr Justice Toose ‘s recommendations and to advise the Government of their views on those recommendations. As I also said yesterday, I met the Canadian Minister for Veterans Affairs last week. Canada is the country which has a repatriation system most similar to our own and, despite the fact that in Canada a number of people have advocated that the activities of the Department of Veterans Affairs should be phased out in some way, that has been found to be quite impossible to do. My own personal view is that for at least a couple of decades a repatriation system broadly along the lines that we have now will be essential. I have given those undertakings to the veterans organisations and I do not anticipate that there will be any change in the basic or fundamental nature of the repatriation system as we now know it.
– My question is directed to the Minister representing the Treasurer. Because of its importance in evaluating the final impact of the Budget proposals on the Australian economic and employment scene, will the Minister table in the Senate within one week a statement showing how the Government proposes to finance the Budget deficit of $2,800m?
-Naturally, the financing of the deficit is a matter for the Treasurer himself. I can only refer the question to him and seek his views as to what course of action he proposes to take.
-Will the Minister for Foreign Affairs enlighten the Senate on passport issue procedure in regard to the position of an Australian national who changes his name by deed poll and then seeks to obtain a passport under his new name? I ask this question in relation to any possible criminal activity that may have occurred under a previous name.
-The main criterion relating to the issue overseas of an Australian passport to an Australian citizen is the absence of any legal requirement for the passport applicant to be returned to Australia. If a passport applicant who was overseas had committed an offence against Australian law and a charge had been entered against him in the Australian jurisdiction, then a restricted travel document would be issued to enable the applicant to return to
Australia to meet his legal obligations. I might add that if Senator Mulvihill had any particular case in mind I would be quite willing to discuss it with him.
– Is the Minister representing the Minister for Aboriginal Affairs aware that co-operatives set up by the Department of Aboriginal Affairs in the Torres Strait Islands, together with some Island councils, have purchased large quantities of road making equipment and building materials ordered through a firm of engineering consultants? Is the Minister aware that, although most of these goods were shipped from Cairns in early March, payment for some has not been made and a few have been paid for by worthless cheques? Is the Minister also aware that the Queensland Government Island Industries Board is holding worthless cheques amounting to many thousands of dollars which have been cashed by Island workers engaged in projects on these Islands? Will the Minister inform the Senate whether the Department approved the purchases and the projects? If so, when will a decision be made as to which body pays for what goods, and when will funds be made available so that Island workers and north Queensland firms can be paid?
– I am aware of the cooperatives and Island councils that operate throughout the Torres Strait Islands. Most of them are funded by the Australian Government through the Department of Aboriginal Affairs making funds available to the councils for certain projects, but the Australian Government is not ordering or paying for particular goods. A grant may be made for roadwork, the purchase of a truck or for some other council project. The grant is made and is payable subject to the expenditure incurred being approved by the Department. If such councils, which are selfcontrolled, are ordering items which are not paid for, that is just a normal business transaction between a trader and a purchaser. The trader has taken a risk. I do not think it is a government responsibility.
I will refer the matter to the Minister for Aboriginal Affairs to ascertain whether the Australian Government in any way has a liability for such accounts. We would be greatly assisted if we had the names of the firms and the purchaser to see what the actual accounts are, whether there is a government liability and whether we should make some further advancements to the organisation for payment.
– My question, which is directed to the Minister representing the Minister for Defence, refers to recent announcements concerning major defence equipment purchases of aircraft, frigates and tanks. As all this equipment has been purchased overseas, can the Minister inform me of the arrangements being made to ensure participation by Australian industry in the projects?
– There has been an assessment by the Government in relation to the purchases of the long range maritime patrol aircraft and the 53 tanks that a substantial amount of offset work ought to be done in Australia. The same assessment will be made in relation to negotiations for the purchase of the 2 frigates. Where we can we are insisting upon a policy of strong participation. In addition I understand that recently the Minister for Defence, Mr Morrison, has made reciprocal arrangements with the United Kingdom Government in relation to possible purchases. This follows the arrangements made in 1973 with the United States of America. In response to possible Australian defence purchases in the United States, the United States Government decided to set up an arrangement whereby the United States Defence Department and industry, in circumstances in which the United States Government could not meet orders for offset components, would allow Australian industry to bid for the work. Technical information in relation to these general orders has been sent to all competent Australian suppliers so that they will be aware of the position.
– My question is directed to the Minister for Agriculture. Following the Government’s referral of the question of the restoration of the superphosphate bounty to the Industries Assistance Commission and the recommendation of the Commission that the bounty be restored, why was no mention of the restoration of the bounty made in the Budget last night?
-I thought I had answered that question yesterday and had explained the processes by which the report has been received by the Government. The report was not in the hands of the Government at the time of the Cabinet sittings that drew up the Budget. As 1 indicated yesterday, the report has been made available only this week. There has not been time to make a proper evaluation of it. I might say that I was requested by one very well known and important person in the Australian farming community, whom I will not name, that the matter not be dealt with until such time as the industry itself has had time to examine the report.
– My question is directed to the Minister for Agriculture and refers to yesterday’s announcement of the sale of an additional 250 000 tonnes of wheat to the Union of Soviet Socialist Republics following an earlier sale of 750 000 tonnes. I ask: Was credit involved in the new sale? What is the total value of both sales? Is the Minister certain that enough wheat is available in Australia to meet these new contracts?
-Yes, the Australian Wheat Board has negotiated a new sale to the Soviet Union of 250 000 tonnes of wheat. It is an f.o.b. cash sale. The total value of this and the original contract referred to by Senator Walsh is around $130m. The long range prospect for this coming wheat crop is improving because of improving weather conditions lately. I am sure that there would be no risk of Australia being unable to fulfil the order.
-Senator Chaney yesterday asked specific questions about some of the things that naturally would be exercising people’s minds. I answered one of them in a later question about Portuguese Timor. I said then that I would be anticipating questions on things such as those which he had mentioned. I could not see that it would be at all practical to make a comprehensive statement. I did not think it would be possible this week to bring down such a statement. I thought that with the Budget being presented the Opposition would have been more interested in that than in foreign affairs. Evidently that is not the case. Since I have been Minister for Foreign Affairs and since this Government has been in power we have carried on a system, which we inaugurated and which is something that the previous Government never did, of always tabling in the Senate a report on every major issue such as my visits to the ANZUS Council, the United Nations or any of the other conferences which I attend, or indeed most visits that I make, so it goes on record and is there for all senators, all members and the public to examine if they wish. That keeps up a running commentary and is something which the previous Government never did. Generally after an overseas tour by the Minister or the Prime Minister the previous Government would give a travelogue telling what a wonderful time the Minister had in other countries.
I am leaving this week to attend a meeting of the non-aligned movement in Lima, then the Seventh special session of the United Nations and also the General Assembly of the United Nations. When I return a report on that trip will be made. In the meantime questions on individual things- Senator Chaney has a particular interest in Bougainville- could be answered if specific questions were asked. Most of the things which he mentioned are in a very fluid state at the moment, as I indicated yesterday in my reply on Portuguese Timor. I am more than willing to give any information which the Australian Government has at the time. I did not think it possible to bring down a statement. I think that our actions have been a vast improvement on the previous Government’s actions. We have kept the Senate informed of what the Foreign Minister and the Prime Minister do in the field of foreign affairs on each occasion on which we go overseas.
– Can the Minister for Foreign Affairs inform the Senate of the present situation in Bangladesh? In particular, does the Government intend to recognise the new regime there?
-At about 5 a.m. on 15 August the Army took over power and installed a civilian government in Bangladesh. There was some brief resistance. It is reported that some 200 were killed. Among these were the President, Sheik Mujibur Rahman, most of his family and several of his relatives. The new Government and Cabinet of ten are headed by Khondakar Mushtaque Ahmed. All members of the Cabinet were in the previous Cabinet. The death of President Mujib who brought his country to independence in 1971 is a matter of very deep regret. We mourn his passing and deeply regret the manner of his death. Our information is that the new Government is in control of the situation in Bangladesh. In these circumstances the Australian High Commission in Dacca will be instructed that it may conduct normal business with the new Government. Other governments that have already taken such steps, which amount to recognition, include the U.S.A., Britain, Malaysia, Burma, Japan, Pakistan, Saudi Arabia, the Netherlands and some others. We have advice that no Australians are in danger, that they are quite safe. Australia’s decision on aid to Bangladesh, including food aid and project and technical assistance, will continue to be made on the same basis as in the past. Australia has a deep humanitarian concern for the problems of the people of Bangladesh.
Postmaster-General aware that many charitable and voluntary organisations throughout Australia sell special Christmas cards and thereby raise funds for a multiplicity of good causes and indeed help to mitigate the charge on the Government, and particularly on our Department of Social Security? As it is intended to increase the standard letter rate from 10c to 18c on 1 September next, thereby making devastating inroads into this worthy fund raising practice, will the Postmaster-General raise with the Australian Postal Commission the question of allowing a separate special reduction in postage on Christmas cards which are sold by these charities? Finally, does the Postmaster-General agree that if no special reduction in postage is allowed on Christmas cards which are sold by charities, there will be a significant drop in the usual revenue which the Australian Postal Commission would derive from handling Christmas cards?
– One of the submissions which were made to me and to the Government by the Australian Postal Commission related to what we considered to be drastic increases in the postage rates of registered publications which, as the honourable senator knows, are distributed to a large extent by charitable organisations. As a result of the submission in regard to those publications and of the submission in regard to newspaper circulation which applied to charitable organisations in particular and to other organisations, I recommended to the Government that a $ 1 m subsidy should be provided. As a result of the provision of a Sim subsidy, for example, the typical charges will rise from 3c to 6c for a small charitable organisation’s monthly newsletter, from 4.5c to 7c for a country newspaper, and from 11c to 14c for a medium weight magazine. Had this subsidy not been applied a small charitable organisation would have paid 12c to send a newsletter, a country newspaper would have cost 12c to be posted and a medium weight magazine would have cost as much as 20c to be posted.
As regards the other question, the honourable senator will remember that last year it was suggested that consideration should be given to providing a reduction in postage rates for Christmas cards. This matter is being considered at present. The present position is that in the considerations which have been given to this matter it has been submitted that to reduce postage rates on Christmas cards would mean that we would have to load up something else. All I can undertake to do is to keep the honourable senator’s suggestion in mind and put it to the Australian Postal Commission. I rather think that the suggestion has already been canvassed in a way that I have partly mentioned. I said yesterday I think that if the performances of the Postal Commission and the Telecommunications Commission are as good as we would hope them to be, what has been suggested by the honourable senator might well be achieved in the future.
– My question is addressed to the Minister for Labor and Immigration. I refer to a complaint which appeared in the Melbourne ‘Sun’ of 4 August last from a farmer in Penola, South Australia, that on applying for assistance under the Regional Employment Development scheme he was advised by a local council officer that his council had received instructions to place farmers at the bottom of the list. I ask: Were such instructions given by the Minister or officers administering the RED scheme, and what was the nature of such instructions? If so, on what basis and for what reason did such discrimination operate against farmers who may have little or no income under existing economic conditions? Does the Government propose to continue any such discriminatory practices against farmers in employment assistance schemes operating in this year?
– I am not aware of the news item to which the honourable senator referred, but I will inquire as to whether the incident that he alleges took place did in fact take place. I must say in passing that I am rather curious about this question because it seems to carry an implication that at least Senator Missen, and perhaps some others on his side of Parliament, approve of the Regional Employment Development scheme and want it to continue. If this is his attitude, I suggest that he take the matter up with the Liberal Premier of Victoria who has challenged in the High Court the continuance of the RED scheme.
– I draw the attention of the Minister for Police and Customs to newspaper reports during the recent parliamentary recess which carried statements that in New South Wales Narcotics Bureau officers had made several significant seizures of the drug hashish oil. Will the Minister provide the Parliament with more details about these seizures and, in particular, establish whether there has been an evaluation of the drug hashish oil?
– The seizure of hashish and other harmful drugs is increasing in Australia. I think the question referred to the seizure in Sydney last month when some 29 000 grams of a particular form of hashish were found. People are now before the court in connection with this matter; so I cannot go into too much detail about it. We have found that a more potent type of marihuana is being refined and distributed world wide. I refer to hashish oil, which is much more potent than normal marihuana. It comes in liquid form, looking something like treacle, and this permits the use of other methods of smuggling. We have found, on 2 occasions in New South Wales, that this substance has been concealed in the lining of cases containing typewriters and sound recorders which are being imported. It has been secreted in such cases. While more seizures are being made, the Department is concerned about the amount of drugs coming into Australia. We know only that the amounts seized have increased; we have no knowledge of the volume of illicit drugs being smuggled into Australia and not discovered.
– My question, which is addressed to the Minister for Social Security, relates to the difficulties facing many farmers on King Island, due both to the disastrously low beef prices and the high cost of transport to and from the Island. A number of farmers there currently are working on Regional Employment Development schemes and at the mine. There are 130 such farmers out of a total of 231. Bearing in mind that many of these people will not be able to continue employment when the current RED scheme project is completed, will consideration be given to making available unemployment benefit payments, on a means test basis if necessary, to any farmers who are unable to obtain employment because of the limited employment opportunities which are particularly in evidence on islands such as King Island?
– I am glad that Senator Bessell raised this matter. As it happened, I was discussing this very question- not particularly in relation to King Island but in relation to farmers generally- with the Director-General of the Department of Social Security only yesterday. A similar matter had been raised by a State Labor member of the New South Wales Parliament regarding a problem which had occurred in his electorate, where a number of farmers are not receiving what could be regarded as adequate incomes. There is a real problem involved because I do not think one can say with any great ease where to draw the line when one finds a falling off in the incomes of people who are otherwise self-employed. If we are to extend unemployment benefits to farmers whose incomes have fallen off, what is the position of someone who owns a business such as a cafe or a garage, the income from which has fallen off, or a solicitor or somebody else who for quite good reasons is not getting work? Senator Greenwood apparently finds it funny. I thought that Senator Bessell was asking a serious question and I am trying to answer it in a serious way. There is a real problem when dealing with people who are self-employed, who have tangible assets and who it can be fairly said are not making an adequate income out of their normal occupation.
Undoubtedly there are some farmers who for a variety of reasons are undergoing some hardship at present not only on King Island but also in other parts of Australia. Although the Minister for Agriculture is not aware of it, I intend writing to him later this week to suggest that there be some consultation between the Department of Social Security and the Department of Agriculture in order to try to reach some conclusion on this matter. It could well be that this is a decision which would fall more within the ambit of the Department of Agriculture than the Department of Social Security. I am still not sure about that. I was asked whether consideration is being given to this question. The answer is that very serious consideration is being given to it.
– My question is directed to the Minister representing the Treasurer. I refer to page 7 of the Budget paper No. 12 presented last night showing that pay-as-you-earn taxation yield in 1972-73 was $3,000m, in 1974-75 $6,000m and in the current year is estimated to be $8,600m. In the light of that increase on an inflated base in pay-as-you-earn taxation yield over last year of no less than $2,600m this year, is it not mere humbug and pretence for the printed speech last night to claim that there was to be a reduction in wage and salary earners’ personal income tax?
– The question, of course, is designed simply to try to hide the fact that this is the first government for 20 years which has taken an initiative which our predecessors should have taken many years ago; that is, we have attempted to bring in a more equitable system of taxation in this country. No manner of quotation of aggregates will alter that basic fact and I am sure that the great majority of Australians, and if the truth be known the majority of honourable senators sitting opposite, wish that the previous Government had taken that initiative.
– My question is directed to the Minister for Foreign Affairs. Is it true that the Philippines and Thailand governments have affirmed that the South-East Asia Treaty Organisation should be phased out? What is the Australian Government’s attitude to this proposal?
– In the communique of 24 July at the end of the visit to Manila of the Thai Prime Minister, the Philippines and Thai governments announced that they had agreed that SEATO should be phased out to take account of the new realities in the region. The Australian Government agrees with the 2 regional members of the Organisation that SEATO should be phased out. SEATO was established in 1955 when the situation in the South East Asian region was quite different from the present situation. I discussed the question of SEATO ‘s future with the Thai Foreign Minister, Mr Chatichai Choonhaven in Canberra on 12 August. We agreed that we should discuss the timing of the phasing out of the Organisation with the other members. We also agreed that, subject to the views of the other members, the meeting of the SEATO Council in New York in late September or early October would provide a convenient opportunity for the adoption of a plan for the phasing out of SEATO. We also agreed that the future of the Manila Treaty was a separate question from the phasing out of SEATO.
– Will the Leader of the Government in the Senate provide the Senate with the full detailed cost involved in the recall of the Senate by the Opposition to sit on 15, 16 and 17 July for the sole purpose of interrogating Australia’s top public servants in relation to the Government’s overseas loan negotiations? Will he also provide the Senate with the full detailed cost involved in the Senate sitting on 22 July on the motion of Senator Hall to allow Senator Hall to interrogate Mr Gerasimos Karidis of Adelaide on the same matter?
-This is a matter which perhaps I will have to discuss with you, Mr President, as well as with the Treasurer. I do not know whether such a calculation could be made, but if the honourable senator is seeking information and if it is available, it will be given to him.
– My question is directed to the Minister representing the Treasurer. In drawing to the attention of the Minister the textual disparities between the Treasurer’s printed Budget Speech and the Minister’s printed speech presented in the Senate last night, I ask: What was the reason for the Minister’s printed speech containing on page 6 only 3 paragraphs on education outlays when that presented in another place contained on pages 7 and 8 ten paragraphs, including very important references to altered funding arrangements for tertiary institutions and commissions? ls it proper to leave such matters of importance out of the Budget speech presented in this place? Was it done deliberately or was it a matter of inadvertence? Will the Minister agree that we should have heard in this chamber that part of the Treasurer’s speech which indicated proposed abandonment of normal triennial funding arrangements for the financing of education?
– There was certainly no intention on the part of the Treasurer or on my part to conceal any matters that were contained in the Treasurer’s Budget Speech. It is customary for the full details of the Speech and the supporting material to be read by the Treasurer himself in the other chamber. I am not able specifically to say why those particular paragraphs were not contained in my own speech, now that the honourable senator has drawn my attention to the matter. I shall discuss it with the Treasurer and give the honourable senator a reply.
– I ask the Minister for Repatriation and Compensation: Is it true that the repatriation local medical officer scheme has become defunct with the introduction ofMedibank?
-The answer is no, the repatriation local medical officer system certainly has not become defunct with the introduction of Medibank. It is in fact the case, unfortunately, that some local medical officers did think that that would be the case and had submitted their resignations before Medibank came into effect. However, I am informed that in the majority of cases those officers have applied to take on once again the duties of local medical officers. I believe that the community generally and the veterans and their dependants in particular should feel some great indebtedness to local medical officers because many of them are people who have, at some inconvenience and without any great profit, engaged in the work of repatriation local medical officers mainly out of their strong feelings of sympathy for veterans. From 1 July last the local medical officer fees for consultations and visits were increased substantially. It is proposed that the payment for these services will be 60c above the benefit paid under the Medibank arrangements, and for the procedures carried out by a local medical officer in his surgery the full schedule fee will be paid. I do not doubt that a great many medical practitioners who have functioned as repatriation local medical officers would be quite happy to continue to do so, even without the payment of the additional fee. However, it is the view of the Government, and it is certainly my view, that if medical practitioners are going to undertake these additional and sometimes rather onerous duties they should be paid an additional sum, which in fact they will be paid.
– I refer to a reply which the Minister for Foreign Affairs gave yesterday to a question I asked as to who was exercising control in South Vietnam. The Minister indicated that South Vietnam was largely under military administration. As the Government has recognised the Provisional Revolutionary Government as the government of South Vietnam and as the Minister indicated that the Provisional Revolutionary Government is not exercising control in South Vietnam, I ask the Minister: To whom is the Australian Ambassador, when appointed, to be accredited?
-He will be accredited to the Provisional Revolutionary Government of South Vietnam.
– (Tasmania- Minister for Agriculture)- For the information of honourable senators I present the following paper:
Statement for the year 1974-75 of Heads of Expenditure and the amounts charged thereto, pursuant to section 36A of the Audit Act 1 90 1- 1 973 (Advance to the Treasurer).
– For the information of honourable senators I present reports of the Industries Assistance Commission on the following matters:
Almonds (By-Law), dated 7 February 1975.
Bags and Sacks of Man-Made Fibre, dated 29 March 1975.
Leather and Leather Substitute Products, dated 10 June 1975.
Rural Income Fluctuations- Certain Taxation Measures, dated 30 June 1975.
Superphosphate (Interim Report), dated 31 July 1975.
Tanned and Finished Leather: Dressed Fur, dated 24 April 1975.
– For the information of honourable senators I present the interim report of the Royal Commission into Alleged Payments to Maritime Unions.
Senator BISHOP (South AustraliaPostmasterGeneral) I present for the information of honourable senators two papers, one prepared by the Australian Postal Commission and the other by the Australian Telecommunications Commission, both entitled ‘Service and Business Outlook for 1975-76’.
Senator BISHOP (South AustraliaPostmasterGeneral) For the information of honourable senators I present a report on a survey conducted by Spectrum International Marketing Services Pty Ltd for the Department of the Environment entitled ‘Public Attitudes to the Environment’. Due to the limited number of copies available, two reference copies of the report have been placed in the Parliamentary Library.
– I present the final report of the Senate Select Committee on Securities and Exchange together with relevant documents:
Australian Securities Markets and their Regulation-
Part 1- Report from the Senate Select Committee on Securities and Exchange- Volume 3- Queensland Mines, Committee Documents, Legal Opinions.
I should explain that in moving this motion it is proposed that when printing this final report as a parliamentary paper it should be incorporated with part one of the report which was presented to the Senate on 18 July 1974.
Question resolved in the affirmative.
Senator RAE (Tasmania)- by leave- I move:
In the preface to its report tabled on 18 July 1 974 your Committee said:
The Committee decided to publish this report without awaiting the completion of a chapter on matters relating to certain announcements and geological assessments by Queensland Mines. We believe however that this chapter provides important insights into Stock Exchange and Company practices as well as providing lessons related to the supervision of the securities industry. It will be published as soon as possible.
This publication is also without the final chapter relating to further, but less important recommendations of the Committee. That chapter will also be tabled in the Senate as soon as possible.
In both instances the early drafts have been completed. However the Committee desired to give further consideration to them and to have them extended.
In taking its decision to table the Report in its present form the Committee recognised the keen interest of the Senate and was aware of the importance of taking the earliest opportunity to provide the major parts of the report to those concerned with the introduction of new laws governing the securities industry and to the public.
The Committee believed that the integrity of the Report would not be destroyed by its publication without those chapters, though we emphasise that the final printed report must contain them.
As you will recall, Mr President, the Committee was not reconstituted to proceed with the task of completing its report until 24 October 1974. It immediately set to the task of finalising the existing draft of Chapter 13 relating to Queensland Mines Ltd. On 5 December 1974 the Government introduced the Corporations and Securities Industry Bill 1974. This took place prior to the
Committee having had the opportunity to complete the early draft of its proposed Chapter 1 7 which, as quoted above, was to relate to ‘further, but less important, recommendations of the Committee’. It had been intended that this Chapter would draw together the many recommendations made throughout the report and would provide further detail of the recommendations, within the Committee’s terms of reference, regarding the powers and functions of the proposed Securities Commission. The terms of reference said that the Committee was appointed to inquire into and report upon:
The desirability and feasibility of establishing a securities and exchange commission by the Commonwealth either alone or in co-operation with the States and the powers and functions necessary for such a commission to enable it to act speedily and efficiently against manipulation of prices, insider trading and such other improper or injurious practices as the Committee finds have occurred or may occur in relation to shares and other securities of public companies, and to recommend generally in regard to the foregoing such legislative and administrative measures by the Commonwealth as will, having regard to the constitutional division of legislative power in Australia, enable the utmost protection of members of the public and the national interest.
We believe that we have fulfilled those terms of reference. It was not our charge to make recommendations in specific detail but rather the word generally’ is used. It was not our function to draft a Bill but rather to outline the nature of the abuses, malpractices and improper practices which we found existed in relation to the operation of our securities markets. With the presentation of this Chapter relating to the abuses and failures of both the self regulatory and government regulatory bodies in dealing with the problems and abuses connected with the company Queensland Mines Ltd we have, we believe, completed an outline of examples of the overwhelming case for the reform of the securities industry and the creation of a Securities Commission.
This Chapter contains matter extending beyond matters otherwise dealt with in the reports. In particular it details cases of insider trading, abuses and failures in relation to geological reporting and the dangers to the investing public of persons assuming roles of potential conflict of interest. It is a good example of the broad nature of the problems involved in regulating the securities industry and of the way in which such regulation involves all States and Territories and extends overseas. It is an example which supports the Committee’s strongly held view that a national approach under Commonwealth law is necessary for the establishment of an effective Securities Commission.
In introducing the Corporation and Securities Industry Bill the then Attorney-General said:
The Senate Committee’s report has been studied closely, and changes have been made to the draft Bill that had already been prepared in the light of the matters discussed in the report and the recommendations made by the Committee.
The Committee believes that once the Bill was introduced the parliamentary process was best served by the development of a public debate about, and a parliamentary consideration of, the Government’s proposed legislation rather than this Committee completing, for publication, its lesser recommendations. The major recommendations appear throughout its published chapters. They were, it is said, taken into account in the preparation of the Bill. Accordingly the Committee’s drawing together of those recommendations and some supplementation of them would add little more than neatness to the Committee’s service to the Senate.
Questions regarding the desirability of a Commonwealth Companies Act or even a Commonwealth Act introducing a part of what may be the necessary company law, as has happened in the composite Corporations and Securities Industry Bill, were not, we believe, included in the Committee’s terms of reference. Of course it is difficult to consider the whole subject without considering this aspect and some comments and recommendations touching company law appear in the general body of the Committee’s report. Mr President, your Committee members considered the question of whether it should, in the circumstances following the introduction of the Bill and before its final report, seek to proceed to consider the Bill itself. Bearing in mind that of its 7 members two were then Ministers of the Crown, it was decided that if the Bill was to be considered by a committee it should be by a committee constituted for that purpose and able to use this Committee’s full report and recommendations in the course of that consideration. We believe that the parliamentary process and the national interest will be enhanced by the action taken in this regard. We remain concerned that the interests of the small shareholder should be protected and advanced within the concept of a free, open, fair and efficient market system. In fact it is integral to it.
The Senate Select Committee on the Corporations and Securities Industry Bill will consider the extent to which the Bill does, in fact, follow the recommendations of this Committee and in the case of divergence then the merits of either proposition. We believe that our reports to the Senate have answered the fundamental question and that the case for an Australian Securities Commission, established by legislation of this Parliament, is overwhelming. We take some pride in the fact that no-one has demonstrated any significant defect in the case studies produced by the Committee to support that case. We take the opportunity to restate that our report was not prepared as a case for the prosecution of any individual or company but rather as a case for the reform of the securities industry. For that reason much of the evidence available to the Committee which may have been necessary for the prosecution of an individual or company but added little or nothing to the description of the abuse or malpractice has been omitted. It is not a Senate Committee’s function to conduct nor make out the case for conducting prosecutions. This is the duty of self regulatory and government bodies to undertake.
It is with considerable faith in the Senate Committee system that notwithstanding the inevitably controversial aspects of the area included in Committee’s terms of reference I am able to present a unanimous report from a Committee comprised of members of 4 parties. I take the opportunity to pay tribute to the preparedness of members to apply the finest principle of Senate committees in conducting a parliamentary inquiry substantially free from fixed party-line positions and in the broad interest of the future Australia. I express the personal view that this is the real role of the Senate. I also take the opportunity to add that I regret that due to the vagaries of political life, one conscientious member of the Committee, whose contribution and loyalty to the purpose of the Committee was considerable, is no longer a member of the Committee. Jack Little played his part well.
I also take the opportunity to reiterate what we said in the report tabled on 18 July 1974 in relation to the invaluable work of the Committee staff and advisers, particularly the indefatigable and brilliant economic investigator Dr John Rose. The publication of the Queensland Mines Chapter brings to mind the valuable contribution of Professor Blainey and Mr Tom Fitzgerald in the preparation of the earlier drafts as well as the further work by Mr Mervyn Lincoln in relation to that Chapter. I wish however to add that irrespective of the assistance in drafting the Committee accepts the responsibility for every word published in this representation, however laborious its production, of its views and conclusions.
I wish to mention also the work of Mr Don Selth Mr Malcolm Hills and Miss Gillian Fleming of the Committee secretariat for their work in continuing the high standard of the work of their predecessors in the provision of the fundamental Senate Committee secretariat work without which our committees would not succeed. Finally, I wish to thank the other members of the Committee for their loyalty to a purpose. I do not need to stress the problems generated by the fact that this Committee, rightly or wrongly, broke new ground in the development of the role of the Senate Committee system. The strains imposed on members of the Committee in retaining its cohesiveness were, at times, very great. The fact that it conducted its controversial inquiry and produced a unanimous report in those circumstances is, perhaps, its most important contribution to the development of the Senate Committe system. Senator Sir Magnus Cormack as the first Chairman of the Committee laid the foundation. In retrospect I can but say I feel honoured to have been involved in the totality of operation. If we proved that Parliament does matter and can achieve something in the overall development and periodic cleansing of our socio-economic system then the time taken was, in personal terms, justified. I seek leave to continue my remarks at a later stage.
Leave granted; debate adjourned.
Motion for Re-establishment of Senate Select Committee on Securities and Exchange
-Mr President, I seek leave to move a motion for the re-establishment of the Senate Select Committee on Securities and Exchange in accordance with the views which I would wish to outline in a moment.
-Is leave granted? There being no objection, leave is granted.
– There is one aspect of the Committee’s work which has not been finalised. Under normal Senate procedure, the Committee would go out of existence on the presentation of its final report. However, as is well known, the Committee accumulated from various members of the public a large body of documents, many of which are confidential and many of which include information about the business affairs of people. It is the very firm view of the Committee that it should be reconstituted for the purpose of disposing of the documents. To that end it will need to obtain some assistance from the archives experts. It is proposed that the documents should be classified as follows: Those for return to the people who submitted them, those for destruction and those to be retained upon various bases. Therefore, I move:
This matter has been discussed at considerable length by members of the Committee. We are concerned that it would be quite wrong for a committee of the Senate to obtain documents from the public and then not deal adequately with the classification and disposal of those documents. The work will involve going through a very large number of documents to classify them, and that will be undertaken as soon as possible.
– My colleagues who are members of the Senate Select Committee on Securities and Exchange- namely, the Leader of the Government in the Senate, Senator Wriedt, the Minister for Social Security and Minister for Repatriation and Compensation, Senator Wheeldon, and Senator Georges- have not spoken to me about their attitude on this matter. I do not know whether they are in agreement with the proposition that Senator Rae has just moved. Therefore, I move:
Question resolved in the affirmative.
Message received from the House of Representatives intimating that it has disagreed to the Senate’s modifications made to the resolution passed by the House of Representatives on 5 June 1975 and desiring the reconsideration by the Senate of the resolution in respect of the said modifications.
Bill received from the House of Representatives.
Ordered that the Bill may be taken through all its stages without delay.
Bill (on motion by Senator Douglas McClelland) read a first time.
– I move:
This is the third time in 2 years that a Bill broadly in these terms has been introduced in the Parliament. The present Bill is reintroduced in accordance with section 57 of the Constitution, the House of Representatives having passed the Bill on 18 February 1975, the Senate having refused it a second reading on 25 February 1975 and the House of Representatives again having passed the Bill on 19 August 1975. Also in February, the House of Representatives and the Senate debated and passed a companion Bill, the Privy Council (Appeals from the High Court) Bill. That Bill marked the final step in the process of excluding appeals to the British Privy Council from decisions of the High Court of Australia. In accordance with the Constitution the Queen has assented to it. It was proclaimed on 14 May 1 975. The process had been commenced with the enactment of the Privy Council (Limitation of Appeals) Act 1968.
The Constitution itself provides by section 74 that no appeal shall be permitted to the Privy Council from a decision of the High Court upon any question, howsoever arising, as to the limits inter se of the constitutional powers of the Commonwealth and those of any State or States or as to the limits inter se of the constitutional powers of any two or more States, unless the High Court shall certify that the question is one which ought to be determined by the Privy Council. The High Court has not given such a certificate since 1912. The point has thus been reached at which, by statute and in practice, the High Court’s decisions can no longer be called in question before any other judicial tribunal.
The process begun with the Privy Council (Limitation of Appeals) Act 1968 and consummated by the Privy Council (Appeals from the High Court) Act 1975 should be carried to the logical and proper conclusion that no appeal should lie to the British Privy Council from or in respect to any decision of any Australian court. The 1968 Bill was introduced by the AttorneyGeneral, the Hon. Nigel Bowen. He is now Chief Judge in Equity in the Supreme Court of New South Wales. As matters stand, a decision of his on the law of New South Wales is still appealable direct to the Privy Council and the High Court may be by-passed. The possibility exists that there may be 2 streams of authority. The existence of the appeal to the Privy Council is embarrassing to the members of that judicial body. It detracts from the position of the High Court of Australia. If the Opposition really accepts that Australia ‘s nationhood requires that its judicial system should be entirely free from the supervision of the courts of another country, sitting in another country, composed of judges appointed by the government of that other country, the Opposition should give its support to the present Bill. Mr President, the Privy Council (Appeals from the High Court) Bill received the full support of the Opposition parties. But, strangely, the Opposition parties declined to support the Bill that I have just reintroduced. They said that they completely supported the philosophical objective that the High Court should be the ultimate court of appeal from all decisions made within the Australian legal system but they also said they regarded the Commonwealth as having no legislative power to abolish appeals to the Privy Council from State Supreme Courts. And, for that reason, as I apprehend, they opposed the Bill. Now, Mr President, this is doing no more than paying lip service to the principle that the High Court of Australia should be Australia’s final court of appeal.
On 19 February the Leader of the Government in the Senate explained to honourable senators that full opportunity was available for the validity of this legislation to be challenged and decided in the High Court itself- in the court that, as we are all seemingly agreed, should in all respects be Australia’s final court of appeal. Mr President, either the Opposition parties are sincere in their protestations regarding the place of the High Court in our judicial system, or they are not sincere. If they are sincere, they will support the Bill and then let the High Court decide any legal questions that the Opposition or the States or anyone else may consider are raised by the Bill’s provisions. Nothing could be more logical. Nothing could be more reasonable. Nothing could provide a more sincere recognition of the role that the Constitution always intended that the High Court should have.
I commend the Bill to the Senate.
Debate (on motion by Senator Cotton) adjourned.
Message received from the House of Representatives intimating that it has agreed to the Senate’s amendments, with consequential amendments made by the House of Representatives to this Bill and desiring the concurrence of the Senate in the consequential amendments and amendments made by the House of Representatives on the amendments of the Senate.
-Mr Deputy President, I understand that Senator Wriedt is now back in the chamber and that this matter, which was adjourned earlier, can be finalised.
– The Government supports the proposition that Senator Rae has put. It is necessary for the Committee to be reconstituted to finalise certain matters. I think that this matter could go through without any further debate.
Question resolved in the affirmative.
Sessional Orders as Amendments to Standing Orders
Consideration resumed from 19 August.
Postponed Item No. 6 (Answers to Questions on Notice- Incorporation in Hansard).
-The Committee was considering recommendations of the Senate Standing Orders Committee for amendments and additions to the Standing Orders. It has completed consideration of all the recommendations, other than those contained in Item 6 relating to answers to questions on notice, the further consideration of which was postponed. The Committee will now return to consideration of Item 6.
- Mr Chairman, as you have already indicated, when this matter was the subject of discussion yesterday afternoon some consternation was voiced by my colleague Senator Cavanagh, and also by Senator Sir Kenneth Anderson, about honourable senators being deprived of their rights in the event of an answer to a question they had placed on the notice paper being provided to the Clerk by a Minister or by a Minister representing a Minister in another place, with the question and answer then merely being recorded in Hansard without an honourable senator being given an opportunity to have the question and the answer read in the Parliament, if he felt that it should be done in that way. Senator Withers, who is not only the Leader of the Opposition in the Senate but also a member of the Standing Orders Committee, and I tended to agree that we should set out to preserve and protect the rights of back bench members of the Parliament, particularly those of a person who is not a member of a political party but who is elected to the Senate as an independent senator.
I think I should place on record the procedure that took place prior to 1 1 February of this year when, as all honourable senators know, the present Standing Orders that are now the subject of debate were discussed and accepted for an interim trial period, such trial period to be reviewed on the first sitting day after a period of 6 months had elapsed, which was yesterday. Prior to 1 1 February 1975, pursuant to the adoption of recommendations contained in the reports of the Standing Orders Committee dated 4 March 1969, 21 May 1969 and August 1971, the procedure that was adopted in relation to answers to questions on notice was as follows:
The Standing Orders Committee report of August 1971 contained a strong recommendation that as far as possible questions on notice and replies be incorporated in Hansard and that an old question and reply be requested only when it was considered specially desirable. As a result of the decision taken on an interim basis on 11 February 1975, the adoption as a sessional order of the Standing Orders Committee recommendation that all answers to questions on notice be incorporated in Hansard eliminated the need for a list to be circulated in the chamber prior to the Senate meeting of the questions to which replies had been received and for an early cut-off time for the acceptance of replies. Replies received at any time during a sitting, up until Hansard cut-off time, are included in the Hansard for that day. The adoption on 1 1 February last of this sessional order has saved time in the Senate and also has made the 2 Houses uniform in their procedure in regard to replies to questions on notice. The new standing orders 102 and 103 that are now the subject of discussion and were recommended by the Standing Orders Committee are in fact similar to House of Representatives standing orders 149 and 150.
As I said before, yesterday I moved the adoption of the proposed new standing orders 102 and 103. Discussion took place and Senator Cavanagh and Senator Sir Kenneth Anderson expressed the point of view that I have already set out. Senator Withers and I tended to agree with those 2 senators that the rights of individual senators should be preserved to have the question asked and the answer given orally in this chamber if they strongly felt that that should be done. It was suggested that this matter be deferred so that the clerks could give consideration to it.
The clerks have now looked at the matter. They have further discussed the matter with Senator Withers and me. I understand that Senator Withers has discussed the matter with Senator Sir Kenneth Anderson. I have discussed the matter with Senator Cavanagh. All four of us agree that at the end of proposed new standing order 103 we should add the words:
Sitting suspended from J 2.47 to 2.1 5 p.m.
Senator Sir KENNETH ANDERSON (New South Wales) (2.15)- I was not present prior to the suspension of the sitting. I presume that there is a motion before the Chair.
-The position is that the Manager of Government Business has indicated that he shall move that the following words be added to proposed new standing order 103: ‘provided that any senator who, pursuant to this standing order, has received a copy of a reply may, by leave, ask the question and have the reply read in the Senate ‘.
– If the question is put to a vote without debate, I will agree. There is no need to speak to it. If it is to bc debated, I reserve my position.
– I know that Senator Douglas McClelland has endeavoured to reach a compromise in respect of the suggestions made by several senators. He has tried to meet the requirement of those honourable senators. It would alter the actual recommendation from the Standing Orders Committee. It seems reasonable to me that in view of the problem which has arisen with regard to the proposed new standing order it would be preferable to give it a trial before we suggest something further. I think the whole purpose of the recommendations of the Committee has been to streamline procedures as much as it possibly can and to expedite the workings of the Senate. I feel that we ought to allow proposed new standing order 103 to remain as it is, at least for a period, to see whether it helps us.
– With the proposed addition.
– It. does not matter much whether we do it that way. I think that would be suitable. I do not think we ought to assume that it will be a permanent feature. At least give it a trial period. We may be better off, we may be worse off. I think that is the important consideration.
– Prior to the suspension of the sitting I had foreshadowed an amendment along these lines: At the end of proposed new standing order 103- the interim standing order, if I might use that expression- there be added the words ‘provided that any senator who, pursuant to this standing order, has received a copy of a reply may, by leave, ask the question and have the reply read in the Senate’. It was suggested that that amendment was drawn up as a compromise between the point of view expressed by Senator Cavanagh and Senator Sir Kenneth Anderson on the one hand and Senator Withers and myself on the other. I suggest that the proposed new standing order has to be read in conjunction with standing order 66. There is a feeling among some of us that if the proposed new standing order as amended is adopted any senator may, by leave, at any time ask the question and have the reply read in the Senate. I suggestI think a common sense reading would suggest also- that it should be read in conjunction with standing order 66 which, under the heading Routine of Business’, states:
The Senate shall, unless otherwise ordered, proceed each day with its ordinary business, in the following routine . . .
The routine to which all of us are accustomed is set out. There is a suggestion of some ambiguity in this new approach. Senator Wriedt has suggested to me that we invoke the proposed new standing order as amended for a trial period of one month, to see how it works and to overcome the blockage. He has suggested that we accept the Standing Orders which have been agreed to already and adjourn discussion on this proposed new standing order for a further period of one month on the basis that the standing order as amended be given a trial for the 4-week sitting period that we have now started.
Senator Sir KENNETH ANDERSON (New South Wales) (2.21)- I agree with the theory of the Manager of Government Business in the Senate (Senator Douglas McClelland) that the proposed new standing order as amended be tested in practice. The suggestion of one month is a little unreal because we are dealing with questions on notice. Unless there has been a significant change in parliamentary procedures- I am not referring to this Ministry, I am referring to the general history of the Senate- the position is a little unreal. It is said that we should give the proposal a trial for one month. It is related to questions on notice. They must go to a Ministry. We have only 7 portfolios in a concept of 27 portfolios. With all the best will in the world, the Leader of the Government in the Senate (Senator Wriedt) and his Ministers sometimes cannot be responsible for getting answers within that time, to give the system a test.
– Could we say this session’? I am easy. I would like to get it tidied up.
-We could say ‘2 months’ or ‘3 months’ or ‘for these sittings in the Budget period’. That would be a test for it. I would be perfectly happy with that arrangement if it is agreed to. If we carry it, it is on the clear understanding that it is on trial, in the new form, for the period of this Budget session.
– To be determined in this sessional period.
-To be determined at the end of this sessional period.
– Although I am not prepared to move a motion, I would prefer to have the matter referred back to the Standing Orders Committee. I can see some dangers in the procedures that have been indicated by the Leader of the Government in the Senator (Senator Wriedt) and the Manager of Government Business in the Senate (Senator
Douglas McClelland). Those suggestions make it virtually mandatory for each Minister on each occasion to give to the senator concerned a copy of the answer before it is given in the Senate. The senator can make a political decision prior to the question being answered, either in the form in which questions are answered now or later, as to whether he will get political mileage out of it. Of course all of us will use that type of operation. We will use it to our best advantage. I think, in view of the conflict on this proposed new standing order, it would be far better if it were referred back to the Committee. The Committee, with the advice of its officers, could bring down a further recommendation.
All honourable senators will recall that at the end of sessions- in the time of our Government and in the time of the previous Governmentone of the last announcements by the Leader of the Government in the Senate is that he has answers to 25 questions or 30 questions. There has been no opportunity for any member to say whether he required to have them answered in the Senate. We are now requiring the Leader of the Government in the Senate or the Manager of Government Business in the Senate to give advance notice of the questions which come in at the last minute. Let us face facts. On occasions, to save embarrassment, governments have delayed until the last minute, answering questions which they did not want to answer. All of us will play politics. There is no question about that. We must be honest in this debate.
Now we are faced with either accepting something that I believe has operated quite successfully during the trial period or making it mandatory for Ministers to give in advance information which should firstly be given to the Senate. We are asking a senator, who is to receive information in advance of the information being made available officially in the Senate, to decide whether he wants the question to be replied to officially in the Senate. I can visualise a situation in which all questions on notice for which answers are available will be required to be answered verbally on Wednesdays. Equally, I can visualise a situation in which a government, irrespective of which party is in power, will say: We will not answer any questions on notice on a Wednesday’. I can visualise that kind of situation developing. This is why I suggest that the Standing Orders Committee should re-examine this question and make a recommendation based on the advice that is available to it. At this time we should not make an on-the-spot decision on an amendment that might prove to be even more burdensome to Ministers and senators than the procedure that has been under trial for some time. I ask the Manager of Government Business in the Senate to take this on board and to give it some consideration.
-This was a simple matter, but it has become very confused during the debate. I do not think that all speakers in the debate have really understood the significance of the matter. When I first entered the Senate the practice was that all questions on notice were answered in the Senate. The Senate then became concerned about the time that this practice took. If an answer to a question on notice was incorporated in Hansard, it was done at the request of the Minister or the senator who asked the question.
When I was a member of the Standing Orders Committee there was a proposal to cut down the time taken in reading answers to questions on notice in the Senate, and I agreed to it. It was agreed that only those questions on notice which a senator particularly wanted answered verbally would be answered in the Senate. A list of questions on notice for which answers were available was circulated each morning, and a senator had to notify the Clerk in writing that he wanted a question on notice answered verbally. The President would call on the question and the senator would get the question answered verbally in the Senate.
Under the Sessional Orders that have operated since February, all answers to questions on notice have been incorporated in Hansard. As the Manager of Government Business in the Senate (Senator Douglas McClelland) said yesterday, I opposed that proposition because I believed that it took away the right of a senator who wanted his question on notice answered orally. But we have operated under that sessional order since February. The proposition has been given a trial and I think it has operated successfully. For some unknown reason we still have a question concerning this matter. It may be that a senator who has asked a question on notice and who wants to play politics will ask to have the answer to that question given on a Wednesday when the proceedings of the Senate are being broadcast. That is his concern. He asks the question for some purpose and he is entitled to get the best value that he possibly can out of the question.
Therefore we decided that there should not be an open season so that every senator could ask that his questions on notice be answered orally. We also decided that we should put into the standing order some reservation for the backbencher who had a particular requirement for asking that a question on notice be answered orally. I did not move the amendment, but the compromise which was reached yesterday provided that a senator could have a question on notice answered orally if he obtained leave of the Senate to do so. That is not allowing a freedom to ask that every question on notice be answered orally. A senator first has to convince the Senate of the necessity to do so.
Although this proposition would have been carried unanimously yesterday, we postponed further consideration of it for the purpose of obtaining the proper wording. Someone has come up with a suggestion today, but it does not contain the proper wording. Although the proposal looks acceptable, as the Manager of Government Business in the Senate has pointed out, there could be complications in relation to standing order 66. It has been suggested that the wording does not say when a question on notice may be asked.
In order to implement the procedure on which we all agreed yesterday, what we want is the circulation of a list of questions on notice for which answers are available. I think that this would be very handy. The average senator does not look at answers to questions on notice when they are incorporated in Hansard, but if he were to have placed on his desk a list showing the questions on notice for which answers were available he would see the question in which he was interested and he would ensure that he noted the answer when it was distributed. If a list of questions on notice for which answers are available were circulated and if there were in the Standing Orders a stipulation which said that at the end of question time a senator could seek leave of the Senate to have answered in the Senate any question on notice to which the answer is available -
– At the end of questions without notice.
-At the end of questions without notice. Knowing what replies the Ministers had, at that time a senator could ask for leave to have the question on notice answered orally, and if leave were granted the question and the answer could be read. It would mean that a few questions on notice would be answered orally. I realise that a senator could not interrupt the proceedings at any time to ask that a question on notice be answered orally or that he could not come into the chamber and ask to have read out the answer to a question on notice that had been given to him 3 weeks previously. We are all agreed on the principle. The only thing involved is getting a suitable wording for the proposal. Today Senator Douglas McClelland has referred to the unsuitability of the particular wording of the proposal. It is a matter of the proposal going back to the draftsman so that he find a solution to the problem.
- Mr Chairman, it has been drawn to my attention that yesterday I moved a proposition that proposed new standing order 103 be adopted; therefore, if we are to proceed with another course of action it would be necessary for me at this stage to seek leave to have that proposition withdrawn. Therefore, at this stage I seek leave of the Committee to withdraw my original proposition that new standing order 103 be adopted.
The CHAIRMAN (Senator Webster)Honourable senators have heard the proposal by Senator Douglas McClelland. Is there any objection to it? There being no objection, leave is granted.
– I now move:
That the recommendation continue as a sessional order Tor a further period of 3 months, subject to the following amendment:
At end of proposed new standing order 103 add: ‘Provided that any senator who, pursuant to this Standing Order has received a copy of a reply may, by leave, ask the Question and have the reply read in the Senate’.
I do not think there is any need for me to elaborate on what has been said already, except to say that my colleague Senator Poyser suggested during the course of his remarks a referral of this matter back to the Standing Orders Committee for its further consideration. I point out to Senator Poyser that the Standing Orders Committee met and considered for quite a long time this and other matters that have been the subject of this debate, and the proposal that I moved yesterday was the one which we came up with and which I suggest has been tried quite successfully for some 6 months. Now Senator Cavanagh and Senator Sir Kenneth Anderson, in their desire to protect the rights of backbench members of this Senate, have suggested that the proposition should be extended to enable a senator by leave -
– And only by leave.
-. . . and only by leave, as Senator Sir Kenneth Anderson suggests by way of interjection, to ask a question that he has already placed on the notice paper and then to have the answer from the Minister read in the Senate. There might be some difficulties as to how and when that should be done. I strongly suggest that it has to be done in conformity with standing order 66 and that is at the end of questions without notice. When questions upon notice are called on, if a senator seeks leave and is given leave to ask his question, it and the answer then given can be read in the Senate.
Senator Poyser mentioned that this will require the honourable senator concerned to be given a copy of his reply before the reply is officially received in the Senate. I do not think there would be many administrative problems about that course. At least I think it is fair to say that in this particular period when we are involved in drawing up rules to modernise the proceedings of the Senate, both as a House generally and as the Committee of the Whole, we have gone much further in a revision of the Standing Orders than at any other time. It would be a pity to hold up the procedures we have adopted to date merely to deal with this one standing order. I am suggesting that there be further experiment with this matter for a period of 3 months. In that time it will be given a fair trial. At the end of 3 months the Senate can determine whether it wishes to proceed with writing into its Standing Orders a provision of this nature or any other proposal. It is for those reasons that I propose the amendment I put forward.
– I move the following amendment:
Delete all words after ‘That’ (first occurring), and insert the words ‘the matter be referred to the Standing Orders Committee for redrafting’.
I know that I will lack the numbers but there is a very important reason for me to pursue this point. I pursue it on a very fundamental basis. If the whim of the Senate is to be the basis determining whether a person can ask questions placed on notice it will be a complete denial of the democracy that should operate in a parliament. I know thu there are many matters about which leave is required. Suppose that a senator desires to ask a question and one person says no to the request because he has some personal reason for doing so. The person wishing to ask the question will not be able to ask it. Honourable senators may say that the commonsense of the Senate prevails but I have seen the commonsense of the Senate upset on many occasions when there is one recalcitrant who wants for some reason to continue to call quorums. I think this proposition needs to be redrafted in order to make it absolutely certain that if a person wishes to ask a question that he has placed on notice that becomes the right of all persons, a right of the Senate, and not on the basis that one individual can say no and refuse that right. I still believe that this question needs further consideration by the Standing Orders Committee and the advice of its officers to attain what we are attempting to attain and that is the right of a person to ask a question if he so desires.
I think that the system under trial was good and I would continue to support it. We do not want to get back to the situation where any amendment relating to the standing order operates on the basis of the whim of one person who may be in a good mood or a bad mood. It is wrong that the Senate should have something in its Standing Orders which would allow that sort of thing to happen.
– But you have no rights now. This would give you a hope.
-If all we would have would be hope I would prefer to have what we have at the present time.
Senator Sir KENNETH ANDERSON (New South Wales) (2.40)- I must indicate that I cannot support Senator Poyser ‘s amendment. The Minister for Police and Customs (Senator Cavanagh) made a helpful interjection when Senator Poyser said that he would prefer the way this standing order has been operating. As we have been operating a senator has no rights. Under this proposition we are saying that under certain circumstances the senator should have some rights. I cannot support Senator Poyser ‘s proposition. The only other thing I had in mind to say in relation to the amendment is that it is written into the motion moved by the Manager of Government Business in the Senate (Senator Douglas McClelland) that this suggestion is to operate only for a trial period of 3 months anyway. If somebody wished to refer the matter back to the Standing Orders Committee at the end of that 3 months that could be done. I have some personal reservations about how we are now proceeding with petitions and would like that matter to be referred back to the Standing Orders Committee. What we hoped for and what we intended is not happening. It may well be that there will be time for some other things to go back to the Standing Orders Committee. This suggestion is to operate on trial for 3 months, as suggested by the Minister, and we should give it a trial.
Senator Sir MAGNUS CORMACK (Victoria) (2.41)- I rise merely to say that I agree with Senator Poyser’s last observation and disagree with the contention of the Minister for Police and Customs (Senator Cavanagh) that the suggestion which has been under trial has worked effectively. It was given a trial because of the distortion that was taking place in the context of questions that had been placed on notice. Certain honourable senators were beginning to manufacture a procedure of their own. It may be said that what is proposed will deny the right of an individual senator and that senators do have rights in this place. So they have. But senators have rights in the Senate only in accordance with the generality of the will of the Senate although measures of protection are built into the Standing Orders. I am sorry to see that there is a feeling growing up that the present practice which has been under trial is to be discontinued.
I now address myself to the amendment moved by the Manager of Government Business in the Senate (Senator Douglas McClelland) and oppose the amendment moved by Senator Poyser. If the motion moved by the Manager of Government Business is carried and there is a trial period of 3 months, automatically the matter must come before the Standing Orders Committee again. The relevant standing order will exist only for a period of 3 months. In order to try to get this Committee out of the bind that it is in now I am prepared to support the motion moved by Senator Douglas McClelland. I think we should proceed to vote on the matter although I am not going to move the relevant motion. I make the point that I support his amendment for the reason I outlined. I think that eventually we will get back to the original draft which is the subject of the Committee’s attention at the moment.
– I want to say a few words in support of Senator Poyser’s amendment. Over the years that 1 have sat in this chamber- I have been here for a short time compared with some other members of the chamber- there has been a continual whittling away of the rights of back benchers to make themselves heard as they ought to be able to make themselves heard in the Parliament. I know that we have discussed a number of the standing orders several times during the past few years. It appears to me that as a result of those discussions and the decisions reached this continual whittling away has been paramount.
For 7 years I sat on the Opposition side of the chamber and with one exception in that period 1 could not get a reply to a question on Wednesdays when the proceedings of this chamber were being broadcast. On the one occasion that I got a reply to a question it brought on such a sense of illness that I had to get a couple of days sick leave in order to recover. I can recall other occasions when there was a tendency on the part of the members of the government of the day to avoid embarrassing questions. On one particular afternoon I sat right through question time with 8 questions. There was no limit to question time in those days. It happened to be a controversial time in the history of the government of the day. What I am saying is not a reflection upon the immediate past President of the chamber but upon his predecessor. I was able to get the call each day after that. The point raised by Senator Poyser is a very valuable and valid one. The success or otherwise of a request for leave to have a reply to a question read in the chamber depends very much on the intellectual capacity or the physical or other health of members of the chamber. If somebody wants to refuse leave that is the end of the question. It never hits the airwaves or sees the light of day, except in Hansard.
I agree with Senator Sir Kenneth Anderson that there are some problems in relation to petitions. I am not happy about the situation either because in view of the way petitions are presented in both Houses of Parliament they are, frankly, not worth the paper they are written on. We did for a short period follow the practice of sometimes taking the message from a petition to a relevant standing committee. I guess we still have that right although it is not exercised very much. Petitions are signed by people who need to have their views expressed in some way. I know there has been criticism at times that there have been inspired petitions but, be that as it may, they still enable the constituent to make his or her protest known. I have 2 petitions in my office at the moment, one of which is opposed to my Government. I deliberately did not present them this week because they would have been lost in a mass of similar petitions, but I will be presenting them on Tuesday. Probably there are a large number of other petitions around at the moment conveying the same message.
I support the amendment moved by Senator Poyser. I believe the rights of all members of this Parliament, regardless of party, have to be protected if democracy is to be maintained. It is said that if a senator from either side of the chamber wants to make himself or herself heard, he or she can do so on the adjournment debate at the close of the day’s sittings. This is not a very satisfactory time to air grievances because, first of all, the Press has virtually gone to bed. If a senator wants any .publicity in the Press it is almost impossible to get. it at that time. If it has been a long hard day, and many of our sitting days in this chamber are long hard days, not a great number of people from either side want to be held up by an adjournment debate. They would much rather go away to complete some work in their offices or go to bed than listen to people speaking on the adjournment. The other main avenue for expressing one’s view, apart from ordinary debate, is the right to ask questions, perhaps controversial questions. Certainly such questions are of some moment to the person framing them and probably of very great importance to the people he or she represents. I think the best thing we can do at this point of time is to let the Standing Orders Committee have another look at the question and perhaps come back with an alternative suggestion along the lines proposed by my colleague Senator Poyser.
– I must again enter the debate to stop Senator Keeffe from achieving the very thing he seeks to protect us from. He, like me and Senator Poyser, is concerned at the taking away of the rights of the individual senator. It is for the purpose of protecting the rights of the individual senator against the recommendation of the Standing Orders Committee, of which Senator Poyser is a member, that I take the attitude I do. As I said earlier, when I came into the Senate everyone had the right to ask a question. We then limited that right by requiring that a senator give notice that he wanted to ask a question on notice orally. In February the Standing Orders Committee suggested that we adopt a sessional order which said that no one had that right, and today still no one has the right, to have a question on notice asked orally. The Senate took that right away by subsequently endorsing the sessional order against my protests. I was trying to protect the rights of the individual with, I think, Senator Keeffe ‘s support. Now we have no right to ask a question on notice in the chamber. If the whole Senate wanted to hear the question it would have to move for the suspension of Standing Orders. I mentioned this yesterday.
I believe that this right should be given to honourable senators and that it should be for the honourable senator who asked the .question to determine whether it should be asked in the chamber. With the attitude of the Senate yesterday I had no hope of succeeding. It was suggested that we reach a compromise so that if the Senate wanted to hear the exceptional question it could be asked and the answer given orally. However, it may be that leave would not be given. We are subject to the one nark in the
Senate who will not give leave and I know this difficulty. There are 3 alternatives. One is to take away all rights, the second is to give a right if the Senate gives leave and the third is to refer the matter back to the Standing Orders Committee to reconsider its recommendation to take away the liberties and rights from the individual. It is all very well for Senator Sir Magnus Cormack to say that what is suggested now has worked successfully, but we took the right away so that everyone was gagged. It could not have worked any other way. If we decided that the only persons to speak in debates in this Senate were to be the leaders of the parties, after 3 months we also could say that that system had worked successfully because there were no long debates.
We can take rights away from the individual for the purpose of getting through business. I suppose that is what the Standing Orders Committee’s job is all about, to try to get through the business of the Senate. In the Parliament we have the unimportant back bencher whose psychology and reasoning we may not understand but to whom it may be important to have a question answered orally. He should have that right. I come down on the side of maintaining the right that we have had for many years here. If we are unable to maintain that right, at least give the individual senator the hope that there will be the odd occasion when the Senate will graciously give him leave, and not take away his right altogether. Senator Douglas McClelland suggested that we give it a trial for 3 months. Let us do that and see what happens. Of course, the Standing Orders Committee at any time can have another look at it without a direction from the Senate that it bring down another report. I suggest we support Senator Douglas McClelland ‘s suggestion and see how it works out.
-The Committee is considering Senator Poyser’s amendment to the motion moved by Senator Douglas McClelland in respect of item 6 of the recommendations of the Standing Orders Committee. The Committee has accepted that we leave out the standing orders 102 and 103 and there is no question about the insertion of new standing order 102. However, there is a question regarding the insertion of new standing order 103. The motion moved by the Manager of Government Business in the Senate in relation to standing order 103 is that certain words be added. Senator Poyser has moved an amendment seeking to delete all words after ‘that’ and insert the words ‘the recommendation be referred back to the Standing Orders Committee for redrafting’. The question now is that Senator Poyser’s amendment be agreed to.
Question resolved in the negative.
Motion (by Senator Douglas McClelland) agreed to:
That consideration of the adoption of the recommendation contained in Item 6 (Answers to Questions on NoticeIncorporation in Hansard), as amended, be an Order of the Day for the first sitting day after 20 November 1 975.
Debate resumed from 19 August on motion by Senator Willesee:
That the Bill be now read a second time.
-We are resuming the second reading debate on the Purchasing Commission Bill. Already in this debate, if I may call it that, we have had a somewhat extraordinary situation. We have heard speeches from Senator Cotton and Senator Maunsell who have expressed clearly the objections which the Opposition has to this Bill and the belief which we have that it is a Bill of such dangerous proportions and containing such dangerous propositions that it should not receive a second reading. But we have not heard anything from the Government. Sitting across from us are the wilting lilies of the Government. We would have hoped that Government senators would have been revived by the recess. I assure Senator Chaney who is interjecting that when I refer to lilies I am not talking about the great cricketer; I am talking about the flowers. I do not know whether the Government’s pitch has been dug up or how we are to explain its reason for not coming out to bat today. What is clear is that apparently no supporter of the Government proposes to defend a Bill which the Government considers of. great importance. The Bill will be left to some Government Minister to deal with in reply to the second reading debate.
In that context it is perhaps worth recording that when this Bill was debated in the House of Representatives in May Mr Lionel Bowen who was then the Minister in charge of the Bill had this to say:
It is very urgent that this Bill becomes1’ law. We want to have it through this chamber this evening. We want to make the point here and now that this Purchasing Commission is vital for the efficient organisation and purchasing of all Government stores and equipment.
To this Mr Killen then replied in his usual clear and gentle way: ‘Rubbish’. I think that ‘rubbish’ was the correct description. In the House of
Representatives we saw the extraordinary situation of a Bill being guillotined through its various stages without adequate debate. Now we have the opportunity for adequate debate on this Bill in this chamber. As Senator Cotton pointed out yesterday the Commission which the Bill seeks to establish would have the task of making purchases valued at something up to $20 billion. The control of those purchases would rest in the hands of one large Commission which it is proposed would handle these matters. One has only to look at the essential proposals of the Bill which propose to establish a commission called the Purchasing Commission to ascertain that it will be given functions not only of advising the Government on matters of policy, procedures and practices to be followed but also to effect the procurement of goods, the actual purchase of goods, on behalf of departments. In fact, it will act on behalf of nearly all of the departments of government. Consequently it is, as I have said, a most significant Bill and one for which one would expect Government senators to have some justification to put before this House and before the people of this country.
– It is indefensible.
– The reason may be that they find it indefensible, but whatever is the reason I think that the silence of Government senators is significant. One finds that this Bill is based essentially on the report of the Committee of Inquiry into Government Procurement Policy which was delivered in May 1974 and known generally as the Scott Committee report. The Bill is not entirely based upon that report; a number of recommendations made by that Committee are not followed and a number of others are left to the regulations which would be made under this Bill if it were adopted. That in itself gives rise to some condemnation because in fact the important questions that are covered should be covered in the Bill and should not be left to regulations. If we look, as we should, at the Scott Committee report, we find that it contains nothing new. There is nothing new about procurement and purchasing policies in this country. These things have been the concern of government, of course, for a long time. In paragraph 4.10 of the Scott report the following is said about existing government policies:
Australian Governments have long subscribed to a competitive procurement system with public tendering as a basic feature. There has been a general principle that the ‘lowest suitable tender’ should be accepted and that some clear justification is needed to depart from this approach. In accordance with this approach (and in support of it) the basis of Australian Government procurement policy has been explicitly stated, at least since 1 96 1 , as being ‘to obtain the best value for money spent’ and it has generally been accepted that this objective can be attained through the open tender system.
The report further points out that there are exceptions in respect of small purchases in relation to which tenders may not be required, and that there are Treasury regulations which set out the way in which such purchases should be acquired. So it is not a matter of the country not having policies in this respect and not having, in certain cases, exceptions where the Ministers have a discretion not to carry out such procedures.
Perhaps while one is referring to existing policies in this regard one might point out the statements made by the Scott Commission in dealing with preference for Australian ownership and control, because some changes occurred in that area when this present Government came into office. In paragraph 4.44 the Scott Committee report states:
In December 1972, the incoming Government introduced a further element into purchasing policy. Following discussions between government departments, held to ensure that future purchasing arrangements for the Australian Government would take into account the question of Australian ownership and control, the Prime Minister directed that Australian Government contracts should be awarded to an Australia-owned company, in cases where Australian and overseas-owned firms submit tenders which meet specifications and are equal in respect of price and availability.
In view of the fact that one of the objectives sought in this Bill is to introduce a number of policies that would be implemented under government purchasing programs, the Committee, in paragraph 4.45 , went on to say this:
This directive -
That is in regard to Australian ownership- does not seem to have been as effective as might have been intended as there are few cases in which price and availability are equal. It has also raised problems in definition as between ‘ownership’ and ‘control’ and, in addition, it needs to be applied in conjunction with the existing Advising Department machinery which is based upon the Australian content in goods offered to the Government.
I point out that, even if the Government were to have this Bill passed and were to introduce policies, there are difficulties in their implementation and, of course, there are grave doubts as to the wisdom of introducing and using such power as this Bill would give to implement various other social and political policies of the Government. In the course of its considerations the Scott Committee summarised the criticisms that have been made of existing government procedures in regard to purchasing. When one considers the mighty powerful nature of this Bill, the nature of the criticisms made in the recommendations of and the references to that Committee are significant. In paragraph 5.2 of its report the Committee says:
In general it could be said that there were relatively few criticisms in departmental submissions either of the policies or the administrative arrangements presently in existence.
So from the departments at least there was little suggestion that there was need for substantial change. In paragraph 5.3 the Committee said: 5.3 One of the most common criticisms made in submissions to this Committee concerned the lack of public knowledge of current purchasing policies. It was also pointed out in a number of submissions that there was no one focal point in the government departmental organisation from which authoritative information about current policies could be obtained or to which any disputed matter could be referred. Contractors dealing with a number of different departments indicated their impression that there was a diversity in interpretation of Government policy which they found confusing. Some departments also emphasised the need for better definition of policies and for some authoritative coordinating body to interpret policies.
One will note that these statements and criticisms would not require the setting up of an all powerful commission. They are suggestions of lack of communication. They show the need for better knowledge of policies and do not show the need to direct purchasing to the hands of one overwhelming and overpowering government department. I suggest therefore that the report does not contain a great deal that justifies the conclusions which the Committee arrived at or the measures which this Bill seeks to implement.
To finalise my reference to this report, when it came to the arguments for and against the centralising of the purchasing function, which is the essence of this Bill, the Committee pointed out at page 68 of its report that whilst there was almost universal support for a central group to establish and co-ordinate purchasing principles, there was only a measure- and that was its word, measure’- of support for centralising the purchasing functions. I do not know how big that measure was but obviously it could not have been very great for such a word to have been used as it was. At page 68 of the report the Committee summarises arguments, which I find of compelling worth, against a centralising purchasing function. The report states:
Those against the concept centred their objections around the adverse factors likely to result from separating the user and the supplier. They advanced the view that something would be lost if a separating purchasing function were to be interposed between the desirable close association of user and supplier. More specifically, it was argued: First, a central agency might not be sufficiently responsive to the needs of operating departments. Secondly, it would lengthen the purchasing cycle and result in an increase in stockholdings and therefore expense. Thirdly, it might not respond fast enough when changes were necessary or in emergency situations. Fourthly, it would be more likely to add to ‘red tape’ than to eliminate it, as it was suggested that extra staff and paper work would be necessary. Fifthly, there would be a division of responsibilities which might increase the number of disputes between departments and so interfere with, rather than promote smooth working. Sixthly, in the case of Defence procurement there could be objections on security grounds. Finally the management of complex projects would be made more difficult, as Defence has argued, and that the lines of communication need to be shortened and improved.
I know that those arguments were not persuasive so far as the Committee was concerned. The members of the Committee rejected them. I do not know for what reason they did so. It is not clear on the evidence or from the report why they rejected the arguments. So far as I am concerned the arguments I have just quoted are very strong and compelling reasons for our not wanting this centralised purchasing function. I am not satisfied that the Scott Committee was justified in arriving at its conclusions, nor am I satisfied that the Bill is justified.
I turn to three of what, in my view, are the main objections to this dangerous Bill and to the reasons why we should feel compelled to reject it at this stage. In the first place, there is the danger of the creation of a great economic and centralised power operating in this community and operating with great power and influence over the private sector of the economy. We all know the power and control that an organisation such as the Myer Emporium, which has a very considerable amount of purchasing to do, has over its suppliers. We know the control that it can have over the supplier’s prices and the demands it can make. These are demands which the supplier must comply with because he is so dependent upon such a company. How much greater would be the power of an organisation with up to $20 billion to pay for work in a year? What an effect it can have upon those who supply the organisation. I think this is a pretty compelling reason for opposing this measure. Even the Scott report alleges that the amount that would be controlled would be just on 23 per cent of the gross national expenditure in any one year. This represents a very heavy power in the area.
The Scott report points out also that there was a great lack of* statistics in this area and that it was difficult for it to come to conclusions. This was indicated in paragraph 6.9 of the Committee’s report and is another reason why one should have care before entering into a commitment of this nature.
In addition to that, and again emphasising the power which would be involved in this measure, is the power in clause 1 7 to which reference has already been made in this debate. Clause 1 7 of the Bill, after all other things have been said, proceeds to state the following about the ministerial power in operating and controlling the Commission:
The Minister may, by writing under his hand, give directions to the Commission with respect to the exercise of its powers or the performance of its functions, either generally or with respect to a particular case.
This is a most sweeping power and would be used no doubt, so that Government policies could be forced upon the Commission when needed. This is a power which should not be placed in the hands of one centralised body.
The second danger, as I see it, is the fact that the use of this power over procurement and purchasing will be used under the Bill for the promotion of government political and social policies. This is clear from the statements that have been made and it is obvious that we can expect the use of clause 17 and other powers in this Bill to give effect to Labor Party policies in the following areas: Urban and regional development, worker participation, compulsory unionism, compensation and insurance, import policies, environmental control, standards and efficiency in research, industry restructuring and so forth. One can imagine the use that could be made of such a power. This point is emphasised in the submission which was made by the Associated Chambers of Manufactures of Australia in respect of this Bill. It stated in paragraphs 3.11 and 3. 12 of its submission:
However, industry does object to the thought that the Government should use its purchasing power to enforce such matters as pollution control, industrial efficiency and safety standards in industry. In particular, industry objects to, in fact rejects entirely, any thought that the Government should use its purchasing power to enforce upon suppliers economic and social aspects of employment and the application of labour code.
Desirable objectives though these and other matters may be, they are not objectives which should be pursued by any Government through its purchasing policies. There are dangers, in any event, in attempting to achieve too much by use of procurement as an instrument of policy. The greater the number of policy objectives aimed at, the more difficult it is to avoid conflict between them. And the introduction of socio-economic policies, as enumerated earlier, would result in utter chaos and jeopardise completely the basic and fundamental concept that the aim of all Government procurement should be aimed at receiving best value for money.
One can see that best value for money might go altogether under this Bill and be supplanted by a number of policies which the Government desired to exploit and thought that this economic weapon could enable it to achieve. There are even powers within this Bill, under clause 9, to declare, by regulation, the policies that are to be adopted. Under clause 15 power is given to the Minister to demand information from anybody, including other departments. Perhaps it seems strange, but clause 45 even confers power to impose penalties- no doubt even penalties upon another department- if information is refused. This may appear to be far fetched but I think it is an obvious power which is allowed under this Bill to the Minister who has control of this great weapon of economic policy.
The third danger in this Bill, as I see it, is in taking the responsibility away from departments that are responsible to Parliament and putting that responsibility in the hands of a Commission. A department has to explain to the Parliament in its estimates why it needs certain things, why it wants to achieve certain objectives and why it wants to buy certain articles. Now we will find that, whilst the department still does that, in fact the real decisions will be made outside its ranks; they will be made by the Purchasing Commission. Of course, the Commission will report annually to Parliament and it will give information. But it is a mistake to impose this Commission between the user and the supplier and it is a mistake to take away from the departments their real responsibility.
That this is so is demonstrated to an extent by the fact that, for no real reason that is given, 3 departments- the Department of Housing and Construction, the Department of the Media and the Department of Services and Property- are excluded from the operation of this Bill. For some reason it is thought that they are sufficiently able to control their purchasing policies but, on the other hand, that all the other departments ought to be included. I suggest that the danger which perhaps caused the Government to exclude those 3 departments without giving proper information or explanation is a reason for excluding all departments from the power which this Bill would give.
I suggest that the Bill should be rejected and that whatever changes are needed- there is no doubt that changes are needed and that there always will be changes occurring as a result of the success or failure of operations over the years- can be achieved quite successfully without going to the extent of creating a Commission which then has this centralised power of purchasing.
It might be suggested that the advantages that need to be obtained could be obtained by a new approach in regard to procurement in which each department could act independently, under the guidelines and supervision of a co-ordinating body primarily concerned with purchasing policy. It would be a body or a committee of some sort, and not a commission. It would be nothing grand, but it would see that people knew what were common policies and what were the desirable objectives. It would be a body that could see, for example, that the documents used by different departments were, as far as possible, standardised so that they could be known and understood by the business community. It would be a body which could help in promotion and the education of persons in the departments as to suitable purchasing policies, but not one with the overwhelming power provided in this Bill. It would be a co-ordinating body but not a controlling body. The remarks Senator Cotton made yesterday contained an indication that when the Opposition comes to power it certainly will be considering the improvement of procurement and purchasing policies; but it will not do so in such a way as to create this great monolith with all the power that would be involved in this proposed Commission.
I draw attention in this respect to one other point which the Associated Chambers of Manufactures of Australia made in paragraph 3.5 of its submission in regard to the Purchasing Commission Bill. It stated:
ACMA is firmly of the opinion that there needs to be a central body for establishing and co-ordinating policies, procedures and practices but ACMA is equally firm in its opposition to a centralised purchasing function. It is not the multiplicity of purchasing authorities which is the root cause of the present inadequacies of the Australian Government’s purchasing policy but rather the fragmentary application of that policy among departments. Indeed, as the report, - that is the Scott report- at paragraph 5.6, rightly recognises,’. . . among departments, policies did not always appear to be applied in the same way and that some statutory authorities and agencies appear not to be required to follow government purchasing policy’.
I trust that we will not be led, by the deficiencies in these detailed areas, to swallow what is proposed in this Bill. I believe that the Bill is not amendable because it proposes the establishment of an institution that would be dangerous to the economic future of this country. Of course, it is a body which accords with a number of other proposals which this Government makes to centralise and to sweep away powers so that the private sector will be thoroughly controlled by the Government. I trust that the Bill will be rejected, but I trust that this will not be the end in any way of consideration of improving the purchasing policies of the Government. I trust that we will not make the mistake of swallowing the establishment of this body in accepting this Bill and taking action which is dangerous for the future of this country.
Senator Sir MAGNUS CORMACK (Victoria) (3.20)- I want to make only a few observations about the Purchasing Commission Bill. I state at the very beginning that I also am opposed to it. Yesterday afternoon when Senator Cotton, who led for the Opposition in this debate, was speaking I made the observation by way of interjection, to which he replied, that I thought it was extraordinary that a purchasing agent or a purchasing commission should be the body to lay down the specifications for which the procurement was desired. Mr President, let me say in a modest way that in my early days I was a personal assistant to the purchasing agents for Holden ‘s Motor Body Builders- that was in the 1920s- later on I was the purchasing agent for General Motors. I do not know what would have been the position if, in the operation of that industry, when the engineering department or the production department, through the supply department, placed an order with the purchasing agent- I am speaking off the top of my head- for a crown wheel for a Chevrolet motor car, the purchasing agent had said that it was difficult to make such a crown wheel, that we could not harden crown wheels in Australia up to that specification and that the departments would have to take crown wheels that could be hardened up to the capacity of the Australian industry. I suppose that the purchasing agent, under those circumstances, would have been sackedand properly so, too. Embedded in this Bill, of course, is a concept that the Purchasing Commission shall be responsible in a very substantial degree for the laying down of some of the specifications of the goods to be procured -
– By the user.
– Yes by the user. I see that there is some general support from the Australian manufacturing industry for the establishment of the Purchasing Commission. I could well understand, as could any honourable senator, that the manufacturing industry in Australia would support government purchasing. But the one problem about it is that Australian manufacturing to a large degree depends for its existence on government contracts. I do not mind that very much, provided the users are able to lay down at least some of the conditions for the goods they wish to use.
I am sorry that Senator Bishop, the Postmaster-General, is not in the Senate chamber. 1 am sure that the 2 commissions that operate under his direction will not be very happy if, for example, the Purchasing Commission lays down the type of equipment to be used by the telecommunications people.
– They would be back to pigeons.
-They would be back to using pigeons or fellows going around holding message sticks consisting of white wands with bits of paper stuck on the end of them. You, Mr President, would be the first to acknowledge and recognise this position, as in your younger days you went to war and flew in aircraft. In those days you would have much preferred to fly in an aircraft on which you could reasonably rely to get you out and back again than to fly in an aircraft, as so many of your colleagues in the Royal Australian Air Force had to do, that was not combat worthy simply because it was the policy of the Government to produce some aircraft in Australia. That leads me directly to what I consider is the most obnoxious aspect of this proposed Purchasing Commission. It is that the defence forces will be compelled to place their procurement orders through the Purchasing Commission. This is stated in paragraph 8.20 on page 66 of the Scott report, which I will read out to honourable senators. It states:
There is much to be said for the Department of Defence viewpoint that the user has to live with the product and that this factor may be more important in the case of defence than in perhaps any other area. The Department of Defence has suggested an approach whereby some of the objections to placing defence purchasing under the Department of Defence can be met. This Committee -
That is the Scott Committee- gave the most careful consideration to the whole subject before it decided to recommend that the purchase of all defence requirements above the tender threshhold should not bc excluded from the scope of its recommendations.
Later on I will give some illustrations of how this operates, but the important thing is to observe the words ‘the equipment that the user has to live with’. That is why I drew your attention to some of the problems that you, Mr President, as a young officer of the Royal Australian Air Force, had to deal with while flying an aircraft. The purchasing agent or Purchasing Commission in this context will designate to the Department of Defence through the procurement authority the type of equipment that has to be used. This will not be done upon the basis of the user’s requirements and the efficiency of the equipment which the defence people would want for their services, but simply on the basis that the Commission thinks it would be good for Australian industry if a piece of equipment were used which was produced in Australia with no acknowledgement as to its efficacy or its use. So on that ground I oppose this Bill utterly. If there is one thing that causes the men in the Navy, the Army or Air Force in the face of the enemy the most concern it is a lack of trust in their weapons. With my experience in war I can cite many such instances. Therefore the defence people have to have some more control over the procurement of their equipment.
On page 7 of the Scott report there appears a 4-line paragraph headed ‘World War II’. It reads:
The Contract Board remained part of the Department of Defence until 1939 when the supply and production activities of that Department were transferred to the newlycreated Department of Supply and Development. The Contract Board was reconstituted under the Supply and Development Act 1939 and Regulations.
I read that paragraph because it is the only observation in the whole of that report on the lessons that had to be learned from the war procurement of 1939-1945- a bare 4 lines. Yet the lessons in government and the lessons for the Department of Defence and for those who were involved- whether they liked it or not- in the war of 1939-1945 were a searing experience in the context of equipment. I recollect one example. The Army was ordered against its vehement protests to take delivery of a certain number of 25-pounder guns manufactured in Australia. The reason that the Army did not want to take these guns was quite simple. On proofing the breech blocks started to blow out. If anything scares hell out of a gunner more than anything else it is to get a breech burst. The reason that the breech blocks were not as effective as they should have been was that the Australian manufacturing involved by the Directorate of War Production was not of an order and nature of technology to be able to make a breech block up to the design requirements of the Australian Army. The Royal Australian Air Force had to accept aircraft produced by one of the echelons of Australian war production. I cannot recall the name of the aircraft. Senator Cotton was in the Air Force. The aircraft had a couple of Spitfire wings gummed on it.
– Do you mean the Wirraway?
-No, the one after that.
– The Boomerang.
-Yes. The Air Force was forced to use those aircraft. Finally, after a great number of your colleagues and men you would have known, Mr President, were killed, it was discovered that when this aircraft went into a power dive the whole aileron control blacked out. One pilot in desperation while coming down from 15 000 feet to 5000 feet started to wind his trim tabs back to see whether it would do any good. To his great surprise he found the aircraft did pull out on its trim tabs. That is an illustration of an aircraft being forced on the user without the user being able to make a protest about it. A purchasing commission or a government department could direct a user to take a particular type of equipment and the user had to take it willy nilly.
While reading this report one finds there is no reference to the actual experience of procurement in war. That is the nitty gritty of the whole business. As it was found out after the war the Contract Board which was taken away from the Department of Defence was not able to handle the procurement requirements of the defence forces from 1939 to 1945. It was then reinserted into the area of the Department of Supply where the defence people at least had a close liaison. The Department of Supply was charged with the procurement, technology, development, engineering know-how and a great deal of the design of equipment used for the defence forces in war time. It is proposed to go back over the tracks and to set up a vast bureaucracy for the control of defence force procurement.
One other matter disturbs me even more. I have noticed in this Government over the last two and a half years a constant thrust in three or four directions at once, but every thrust has been interconnecting. Honourable senators who care to look at the Defence Force Re-organisation Bill which is in another place at present will find that the whole of the requirement for the defence force will be embodied in civilian control inside the Department of Defence. That civilian control obviously will be responsible to a civilian secretary of defence and will be under the control of a Defence Minister who will be under pressure from the Chairman of the Purchasing Commission, as a purchaser, laying down its own specifications to say that that is the equipment that the defence Services have to take. That is not good enough for me. Either we abolish the defence forces altogether on the basis that the United Nations will look after us, and then we can disband the defence Services, or we are to have a defence force which is maintained at the highest level with the equipment that is desirable for those people in the defence forces and that means sailors, soldiers and airmen who are charged with the defence of this country. On that basis alone- the proposed taking over of the defence procurement- I will not countenance any further discussion on this Bill.
– I would like to speak to this Bill and connect myself with the total opposition to the proposal for a centralised buying authority for very nearly the whole of government procurement. The Purchasing Commission Bill 1975 is a particularly important Bill. I think the people of Australia and honourable senators should be aware that it is one of a number of very strong socialist proposals which the Labor Government is putting forward not only at this time but has been putting forward over the past year. The Senate notice paper at the moment lists not only the Purchasing Commission Bill. The Senate also has to discuss the Australian Government Insurance Corporation Bill, which is aimed at the elimination eventually of all private insurance in this country, the Inter-State Commission Bill, which by its very reading will have a great effect so far as the strength and residual value of the States in this Federation are concerned, the National Compensation Bill, which again will see to the end of private compensation and a number of other Bills which are clear in their intent.
As I have said on a number of occasions- and I repeat it following the Budget last night- this Government is being particularly successful. It is being particularly successful in its aim of socialisation in this community. It has little care for the quarter of a million people who are unemployed; it hardly makes reference to them. But it does press on with its aim of the socialisation of the means of production, distribution and exchange. Indeed, the setting up of a central buying agency for most departments is a step in that direction. Arguments can be produced that a modernised buying system for an organisation can be contained in one tightly controlled department within any instrumentality or company, but in this instance the Federal Government is not aiming at that. For peculiar reasons of its own it wishes to exclude 3 particularly important departments- the Departments of the Media, Services and Property and Housing and Construction. Each of those departments has, in its own field, a very great interest in purchasing. It is very difficult to accept the arguments put forward in the Minister’s second reading speech to support the centralisation of buying when one finds that 3 Ministers apparently have argued in some way that because of the peculiarities of purchasing within their departments they should be excluded. One wonders why the particular interest of the Minister for Services and Property in purchasing land and real estate for the Australian Government should be excluded. The only reason I can think of is that the Department might want to do a gerrymander, as it did in Hobart in purchasing some union building there for what was apparently an excessive amount.
I would not trust this Government with the overall control in one particular department of the purchasing of requirements for the Commonwealth. It is dangerous. If one has a knowledge of what is required in the community to get the best price, one knows that there must be access to a number of buying authorities. There must be an interest by the manufacturers and distributors to ensure that they are able to approach a variety of bodies and make them aware of the particular type of article that can be supplied. This would be cut out under the proposed Commission. I imagine that under this Government it would be difficult to find a fair proposal given for the purchasing of goods by the Commonwealth. For instance, I wonder what part of a gift of $70,000 by Rupert Murdoch and his newspaper to the Australian Labor Party would play in the placing of advertisements by the Commission. I would have no trust in this Commission, particularly in the light of the words which came recently from a Prime Minister wishing to damn the Opposition because it had received contributions from some bodies to its political coffers. A little while ago when the Government was attempting to introduce a Bill requiring political parties to disclose the amounts they have received in contributions, we heard no word from a Prime Minister and his Party about what was being done at that time by one of the major newspapers in this country.
In relation to the purchasing of an item such as margarine- and I understand that these days the troops are fed mainly on that- where would the encouragement come from for the placing of orders? I know of one instance where, when margarine companies were attempting to expand their trade and to manufacture in the Australian Capital Territory, the Labor Government, without consultation with any of the other manufacturers selected one manufacturer who had applied previously and granted him a licence to produce in the Australian Capital Territory. The manager of that company has been exalted by this Government into a high position in the arts. No restrictions whatsoever have been placed on the production of those goods or on the effluent that may flow from the factory that is established in the Australian Capital Territory. But we do know the benefit that has flowed to a political party. We hear the great Australian Labor Party saying that it abhors takeovers by multi-national corporations, yet we find that when that margarine manufacturing company put up a proposition that part of its works be taken over for $ 1 , 250,000 and had that proposal rejected by the proper authority which investigates foreign takeovers in this country, the Attorney-General of Australia put his seal of approval on it, contrary to the requirements of the Commission that looked into the takeover.
I have very little trust in this Government centralising total purchasing control for government instrumentalities. If one looks at the various sections of this Bill one finds that it is very wide in its ambit. It gives an opportunity for the Commission to purchase on behalf of nearly any instrumentality, body or authority. This Government has forced money- and very attractive money too- into municipal councils, it has given money to school authorities, and under the Australian Assistance Plan it has given money to unions so that they may do particular work. All sorts of bodies in Victoria have received thousands of dollars in this way. Before very long, if this Bill were passed, we would have the Government saying to each of these bodies, including the State governments: ‘We are giving you money. We now require you to purchase through our central authority’, and the whole basis of commercial activity in this country would break down.
I refer to the powers of the Commission, which are set out in section 6 of the Bill. It states:
The Commission may do all things necessary or convenient to be done for or in connection with the performance of its functions and, without limiting the generality of the foregoing, may-
enter into arrangements or agreements on its own behalf or as agent for Australia or an Authority or for a Governmental body approved by the Minister. including arrangements or agreements with suppliers of goods or services for the supply of goods or services from time to time as required;
Under paragraph (b) apparently the Commission is not only to engage in purchasing but also to undertake research. Paragraph (b) states: undertake research, or arrange for research to be undertaken, into the policies, procedures and practices followed by Departments or Authorities or by any other bodies or organisations with respect to the procurement of goods, works or services or the disposal of goods.
If one has any regard for the retention in Australia of any type of competitive system and if we are not to get into the total socialist theory that is so rampant at the moment and is so encouraged by this class of government, I would say that this Bill must be totally rejected.
- Mr President, the Opposition has indicated that it is going to oppose the Bill in the second reading stage. Before dealing with the main question of the Bill, I should like to refer to the comments made by Senator Sir Magnus Cormack, who roamed far and wide and gave a very harrowing description of an aeroplane built during the war that was unsuitable. He made the point that because of that example this Purchasing Commission could foist on to buyers, on to the people who have to use the goods eventually, goods which would be unacceptable to them. Unfortunately, the honourable senator has not read the Bill because if he had looked at clause 1 3 he would know that Sir Walter Scott had foreseen this possibility and had moved against it, and the Bill reflects what the Scott Committee said. If Senator Sir Magnus Cormack had given a little more time to reading the Bill and a little less time to histrionics in his speech he would have realised quite clearly that clause 13 provides that if there is a dispute between the Commission and the person who is finally to use the goods then the user of those goods has the veto. So the whole of his speech was quite irrelevant.
As there has been an intervening recess of the Parliament might I remind you, Mr President, of what has happened. The Opposition asked for an adjournment of the debate on this Bill on 28 May to allow it time to examine the Bill carefully. The Opposition has had 3 months to look at the Bill and a longer period to look at the Scott report. It is obvious from the speeches of members of the Opposition that, if they used their time diligently, they have failed completely to understand the proposals of the Bill. They have conjured up a picture of a vast, cumbersome and monopolistic government purchasing agency which would bring no commercial benefit and which would exercise total government control over industry. That is absolute nonsense. If the members of the Opposition had honestly applied themselves to the Bill and to the report they would not have dared to say what they have said. Senator Cotton referred to purchases of approximately $13 billion being shown in the Scott report as coming within the scope of the Purchasing Commission. He suggested that given changes in prices since 1972-73 the Commission would have a buying power of $20 billion. That is quite absurd. The total value of all purchases, except for land and buildings, by Australian Government departments and authorities in 1972-73 is shown in the Scott report as approximately $1.3 billion, not $ 1 3 billion. Unfortunately Senator Missen never checked those figures and repeated them.
– What is the figure again?
-During the course of this -
– Have you not read the report yourself, Minister?
– I do not think you have read the report, Minister. Those figures are incorrect.
– I will quote you a page.
-I will quote the honourable senator a page.
– You should get the correct figures.
-The honourable member’s speech was so ridiculous I think he ought to listen. On page 50 under the heading ‘States and their Instrumentalities ‘ the report states:
If payments Tor salaries and wages in all government sectors are deducted, an estimate or the total magnitude or government procurement would be about $5,226m, of which about $ 1,386m -
That is about $ 1.3 billion- is expended by the Australian Government and its various authorities . . .
The rest is expended by the States. We have heard some pretty wild statements. Senator Missen said that this Bill could jeopardise the whole economic future of Australia. Senator Webster said that the whole commercial operations could be destroyed. What about getting back to something reasonable?
– That is what you seek to do.
– If we were seeking to do it I would suggest -
– You are being successful.
– If we were seeking to do it I suggest we would have to have a very much stronger Bill and a very much stronger weapon than the proposed Purchasing Commission. The Bill seeks to take the various purchasing sections of the government departments and to put them into one instrumentality. It is suggested that we will use that instrumentality to destroy the whole economic future of Australia. This Bill incorporates the recommendations of the Committee of Inquiry into Government Procurement Policy. That Committee of inquiry was headed by Sir Walter Scott who is one of Australia’s most distinguished management consultants and has had many years experience of the problems of both industry and government. Of the 4 members of the committee no fewer than two were management consultants. Mr Tune, the other management consultant, is a man of extensive experience in industry as an executive, as a consultant accountant and as a management consultant. It is not realistic to claim that a committee with such a membership would recommend a form of organisation which would be unwieldy and inefficient. It would be further ridiculous to suggest that this type of committee is telling us how to ruin the economic future of Australia or socialise Australia in one fell swoop. Nor is it accurate to refer to the proposed Commission as a monopolistic agency.
It is quite true that both the Scott Committee and the Government endorse the principle of centralised purchasing, but at the same time the Scott Committee made some quite important qualifications concerning the application of this principle. In short, the proposed Commission will not occupy a monopolistic position. As pointed out in the second reading speech, it will be taking over progressively the purchasing activities which are at present distributed across a wide range. But it would not make sense to have the Commission purchase each and every item that is required by the Government and it is quite wrong for the Opposition to imply that that will happen.
It is claimed that we wish to create a large, expensive and inefficient bureaucracy. That is absolute nonsense. The 800 to 1000 people to whom the Opposition referred are already engaged in procurement. What is proposed is that those existing resources should be deployed to better advantage so that in the longer term economies can be effected in staffing. There is much to be gained by moving towards a much greater centralisation of government procurement. The Scott Committee set out the reasons why a central agency would be more economical, more efficient and more flexible than the present fragmented arrangements. The Opposition however has completely ignored the Scott Committee’s arguments. There is nothing novel about centralised purchasing arrangements. The governments of the Netherlands and of Canada have central agencies. The Canadian agency handles a greater volume of procurement than is envisaged for the Purchasing Commission and has effected considerable economies in administrative costs. The Opposition’s claim that this legislation will damage the interests of industry is completely without foundation.
The Scott Committee’s report gave great prominence to the problems currently faced by industry in meeting the Government’s needs; and this Bill reflects that concern. The Purchasing Commission will be required to consult with industry concerning its proceurements operations, procedures and practices. A high level advisory committee is to be established to facilitate the consultation process and that committee will include representatives from the business community. If the Opposition were really concerned with the interests of industry it would not oppose this Bill; it would support it. The Government already has the power to use the purchasing mechanism as an instrument for various policy purposes. If it needed further powers for some particular purpose it would not be obtaining any of them under this legislation. Nor could it be argued that the creation of a strong and independent purchasing body of the kind proposed in this legislation would make it easier for the Government to use the purchasing instruments for such purposes. Indeed, the contrary would be the case.
The Bill makes it mandatory for the Commission to publish any ministerial directions in its annual report. This represents a distinct advantage on the present situation under which there is no obligation on the Government to reveal publicly its purchasing policies and procedures. Indeed the previous Government did not do so. Although the Minister’s directions must be set out in the Commission’s annual report it has still been argued that there is no immediate accountability. That is not a realistic objection. If the Commission so desired it could reveal any such directions immediately- that is, it need not defer such action until its annual report. It is suggested that the Purchasing Commission will prevent or inhibit consultation between user and supplier. That is simply not the case. Nothing in this Bill will inhibit such consultation and the Bill ensures the right of the user to specify what he wants in consultation with the Commission and to have the final say on the technical suitability of goods offered.
It has been claimed that the power in clause 1 7 is too wide, lacks immediate accountability and would be used for political objectives. The reserve power of ministerial direction is a normal provision in Bills relating to statutory authorities. Many cases could be cited and there is no evidence to suggest that such powers of direction have led to abuses in the past. It is in fact a highly desirable provision. It would be quite wrong in principle to allow a statutory body of this nature to be completely independent of the government of the day which is finally responsible to the Parliament for the Commission’s activities. In a democratic society the government of the day must have a reserve power of this kind. Whether the Government decided to use purchasing as an instrument to facilitate the implementation of social policies is irrelevant to the question of the creation of a Purchasing Commission.
It is clear that the Opposition has made no serious attempt to study the Scott report or this Bill. It has produced no substantive arguments to counter those set out in the Scott report in support of centralised purchasing arrangements. Instead of seriously discussing these arguments which favour the centralised Purchasing Commission as being more efficient, economical and flexible, the Opposition has conjured up a quite misleading picture of a monolithic body which could dictate to departments and industry alike. It has conjured up the idea that this Bill would be used to advance socialistic objectives. The fact is that this legislation would make it more difficult for the Government to pursue social objectives through procurement. What is proposed is an independent statutory body at arm’s length from political processers and obliged to report fully to the Parliament and the public. There are also many other safeguards.
It has been said that the Bill is not in the best interests of industry. The contrary is the case. This Bill provides for open and rationalised procedures and close consultation with industry and includes safeguards which have not existed previously. Finally, this more open approach of the Commission reporting to Parliament on its activities would be far more in keeping with our democratic traditions. It represents a considerable advance on past practices where, for example, some of the previous Government’s purchasing policies remained confidential for nearly a decade. It is obvious that red herrings have been drawn across the track. There has been no serious analysis of the Bill. As I said on the previous occasion when the Opposition delayed consideration of this Bill, its purpose was not to examine the Bill. The Opposition uses its numbers in the Senate to delay, to defeat and to knock wherever it possibly can. It was not a genuine request for time to look at this Bill. The way in which this debate has been conducted bears out my statement on that occasion.
That the Bill be now read a second time.
The Senate divided. (The President- Senator the Hon. Justin O ‘Byrne)
Question so resolved in the negative.
-I seek leave to make a brief statement concerning arrangements between Whips.
-Is leave granted? There being no dissent, leave is granted.
– By arrangement between the Whips in the Senate, Senator Jessop will not vote in any divisions this day, to compensate for the vacancy caused by the death of Senator Milliner.
Debate resumed from 3 June on motion by Senator Wheeldon:
That the Bill be now read a second time.
– The subject matter of this Bill is involved also in the Housing Loans Insurance Bill which is dependent upon this Bill. I will proceed to debate both Bills cognately, provided the Minister for Social Security and Minister for Repatriation and Compensation (Senator Wheeldon), who is in charge of the Bills, has no objection.
– I agree.
-Debate on this Bill was deferred on 3 June 1975 to allow time for consideration and detailed study by interested people and involved parties of the ramifications of the matters concerned with the legislation.
This means the Government as well as industry. It does not mean only one side. This meant something like 1 1 weeks in which various areas of this important and contentious piece of legislation could be considered. As some observations about periods of reflection and delay fell from the mouth of Senator Willesee, I thought I might make similar observations. I did so at the time I was arguing that consideration of this Bill should be deferred. I have had a lot of work done on this matter since. I shall quote some but not all of it. One of the things that one would note in the House of Commons, from which we have drawn most of our practice and procedures, is that the report in the House of Commons on public bill procedure is the best example that one would wish to find to refute the Australian argument that government legislation should not be impeded by critical analysis. I find it difficult to understand Senator Willesee in his reluctance to permit an Opposition, and indeed a people and a government, time in which to reflect upon and consider pieces of legislation which are of themselves of transcendental importance- and the Bill which we are considering is such a piece of legislation. I shall refer to what Sir Ivor Jennings said in 1969. He said:
The Government recognises the right of the Opposition to criticise, and it therefore willing and indeed bound by convention to allow ample time for such criticism to be made effective.
Why not? He also said:
The Opposition is not just a nuisance to be tolerated, but a definite and essential part of the Constitution.
Now I shall refer to an observation by Lord Goodman in a volume entitled ‘The Corridors of Lordly Power’. He said:
We are threatened with the possibility of what is called a constitutional crisis. A constitutional crisis is when the Lords threaten the use of legal powers bestowed on them by the legislation which ultimately trimmed their wings. That it should be regarded as a piece of effrontery to exercise acknowledged legal powers is in keeping with the trend that the assertion of any legal right is presumptuous by the owner of that right and a piece of callous inhumanity against whoever infringes the right. This is not the place to discuss this current mania except to emphasise that if the Lords do assert the rights they are entitled to assert, a response that those rights should be immediately curtailed needs to be justified not in terms of what they do, but of why they do it . . . If rights exist which can be used to rectify injustice to prevent the violation of principle and to maintain some of our crumbling structure of liberty, it will be surprising indeed if, in the ultimate, free Englishmen fail to make use of them.
That is equally true of free Australians. In an earlier day Bagehot had this to say about the parliamentary life in which we are all involved:
The distinguishing quality of Parliamentary government is that in each stage of a public transaction there is a discussion; that the public assist at this discussion; that it can, through
Parliament, turn out an administration which is not doing as it likes, and can put in an administration which will do as it likes.
I make those observations because I have become very tired of hearing this proposition that all that the Senate was doing in its opposition was to delay unconscionably, with no thought. It is completely incorrect, it is completely false and it is not proper. The Senate’s function is to exercise a review, to exercise a check and, if necessary, to take time to enable itself to think, to enable the community to think and indeed to enable the government, if it wishes to do so and is so qualified, to think.
There are 3 areas in this piece of legislation which really can be taken as a combination of interests. There is the case for a need for an insurance office to be operated by the Australian Government in the present commercial insurance scene. There is the area of national disaster insurance. There is the possibility of the transfer of funds from the private sector to the public sector by some form of compulsion or direction. In general, one of my great concerns- I think that the Opposition would equally hold this concern with me- relates to the problem of the possibility of the transfer of assets from the private sector to the public sector at a time when we are really seeing too much of this anyway. There is the possibility of private insurers being driven out of business by lower rates through a subsidised government insurance office. At present there are 45 life insurance companies and 260 general insurance companies in Australia. The investments in the insurance industry represent more than 10 per cent of the total private capital formation in Australia. The industry, not including superannuation funds, has assets of about $ 1 1 billion, equal to 20 per cent of the total assets of Australian financial institutions.
We think that the AGIC, as proposed, would not be a fair competitor. It would have unlimited guarantees by the Government for its liabilities. It would have Treasury guarantees for its borrowings and interest payments. The Treasurer could appropriate funds to the AGIC at any rate of interest or on any terms and conditions. There is some considerable doubt as to whether the Trade Practices Act would apply to the AGIC. It would not be liable for stamp duty or fire brigade levies which of themselves are quite onerous. The Treasurer could determine its return on capital, if any. The AGIC could use the facilities of other government agencies, such as the Post Office, quite cheaply. We hold the view that the insurance industry in Australia is already quite competitive and that government involvement in it through the AGIC would lead to a transfer of investible funds from the private sector to the public sector. We believe that this would be a piece of economic madness at a time when private investment is lagging, when there is a serious investment downturn. Out of all this is flowing unemployment of a massive consequence. Why would the Government interfere in an exercise to cause further trouble, further confusion, further uncertainty, further concern and further decline in investment? Real private investment in this country has declined by about 14 per cent during the last 12 months. Here may be found quite a pa rt of the problem that is causing unemployment, and every indication that one has is that unemployment will grow and not diminish.
In the last 2 Budgets the Government has taken quite serious measures to disadvantage the insurance industry by varying its tax liability positions, and also- there is more work to do on this, but this is what one gathers from reading the Budget Speech and supporting documents as carefully as one could last night- there is to be a disincentive again to the insurance industry when the facts truly emerge. We do not think that the Government has given any sound reason at all for entering the insurance industry, but it has made some comments about national disaster insurance. If one looks at this one could say that the claims in the second reading speech about fair competition do not seem to be justified in any way by the Bill. There is the interest-free capital grant. There are further advances at the discretion of the Treasurer concerning repayment. By clause 14 a Minister may direct the AGIC to write any class of business in some subsidised fashion. That is the interpretation that we place upon clause 14 as we read it. It is suggested that a Minister may ask the AGIC to write any class of business in accordance with unsound commercial principles, thereby exempting it from taxation which other companies are bound to pay. Clause 14 is a long clause, and I will not read it. Sub-clauses ( 1 ) and (3) of clause 14 seem to me to lie together in giving a clear indication of a direction by a Minister to the Corporation to do insurance business which may of itself be unsound in insurance terms.
Senator Wheeldon who is in charge of the Bill has, I understand, declined to amend it to remove these and many other cases of unfair advantage. This is what is stated to be the case by those people who came to see the Opposition during the period of 1 1 weeks which we had to consider further this very serious measure. A number of amendments were proposed and discussed in the House of Representatives, and they were also raised with the Government by the people in the industry. So the Government itself has had 1 1 weeks in which to consider possible changes and possible amendments to the Bill, but the Government has brought none of those forward. So one has the clear view that the Government is going ahead blindly, determined to do this against all comers and having little regard to the objections raised by the industry or by the Opposition.
The term ‘natural disaster’ is not mentioned in the Bill in any consequential form. We in the Opposition hold the view that the area of natural disaster calls for treatment, and I shall deal with that shortly. We believe that the industry submissions on this vital matter that were made to the Treasury would well stand publication and further illumination in the public interest. I have a great mass of documents dealing with this, but I shall just mention the fact that in October 1974 the establishment of a national disaster insurance scheme or fund was proposed in a report to the Treasury by the general insurance industry. That is certainly available to the Government because it is available to me. I have a brief summary of the report which states that the insurance industry plan was proposed to the Government following a feasibility study carried out by the industry, following discussions between the insurance industry and the Prime Minister after the disastrous flood in Brisbane in January 1974. The study was carried out by the industry in a report presented to the Treasury in October 1974. It demonstrated the need for a natural disasters relief authority. It proposed that the Government should establish a statutory corporation to be known as the national disasters relief authority. The functions would include the administration of financial disaster relief, the prescription of measures for minimisation of risk exposure to disasters and the co-ordination of the activities of various government and private agencies in the mitigation of the effects of natural and other disasters. It demonstrated a need for a fund. It demonstrated that Australia does suffer from catastrophes and that the potential for these still exists and may perhaps be greater. Experience has shown that disaster insurance is purchased only by those who are aware of this potential. A voluntary fund is insufficient to provide for catastrophe and the current taxation laws in Australia do not provide or encourage the establishment of long term reserves by reinsurers for these disasters.
The proposed financial disaster relief function could be carried out by a fund to be known as the national cyclone, flood and earthquake disaster fund, and it would provide financial compensation for damages caused by cyclone, flood, earthquake and related causes. It could be integrated with loss prevention measures. It is intended that such a proposed fund would be self-supporting over the long term without relying in any way on consolidated revenue or other temporary funding. The only direct involvement by Government would be as lender of last resort. The fund as proposed would be serviced by the insurance industry which would join together to do this. It would be re-insured by the insurance industry. The problem of the uninsured people was dealt with also.
Quite a massive amount of material is available and I am quite sure the Government has access to it. I believe there is a solid case for the Government to take this Australian Government Insurance Corporation Bill away and forget about it and to come back with a well-founded, well-thought-through proposal to cover the specific area of national disaster in co-operation with existing industry without creating a quite unnecessary new device to do something that the existing organisations could do quite adequately.
Now I want to talk about the possibility of capital transfers. In this area we are engaged in a fairly serious matter. If we look at the problem of the Australian economy at the present time what we need very late in the day is an answer to a very serious matter. It would be very proper in view of the massive size of the deficits that this nation is now engaged in for the Government to indicate clearly in its Budget speech how it proposes to finance deficits of such magnitude. I have been concerned about this problem for quite some time. I was concerned about it during the overseas loans debate and have had some work done on the matter. If honourable senators look at table 6 in statement 6 in the documents which accompanied the Budget speech last evening they will see the various deficits that have been financed by Australian Governments over the years.
– What is that paper?
-It is the consolidated Budget speech with accompanying documents. I refer to page 144, table 6 of statement 6. If honourable senators look at it they will see that over the years the principal method of financing deficits has been by way of loan raising within Australia, with redemptions involved. Over the years there has been a net outflow of funds on overseas account as we have paid back more overseas than we have borrowed. Substantially we have funded deficits by borrowing within Australia, by the raising of proper government loans on proper terms and conditions which have been thoroughly and adequately known. In the 5 years to 1974 the net proceeds of loans raised in Australia have been consistently higher than the Budget deficits. Up to that point of time the whole excess of such had gone into what are called cash balances. The situation in the year just ended has been quite different. The large deficit to the end of June was financed by some quite strange arrangements. We can find this by turning to another Treasury statement of some importance which is headed ‘Financing Transactions’ and which appears on page 117 of the Budget speech. Honourable senators will find that that extravagance and over-expenditure of last year was financed principally by the issue of short-term credit and Treasury notes to the total value of $ 1,689m, and that there has been a rundown by $660m of the previously accumulated cash balances created in the time of the previous Government. What is it that we need to know at this point of time about the situation at the end of June this year? With the order of deficit of $2, 800m which is now being talked about what we want to know are the proposals to fund that deficit. Is it proposed again to issue Treasury notes on such a massive scale, money at increased volume for 13 to 26 weeks, or what is proposed? How is the Government going to do all this?
The cash balance situation is quite alarming. The best information I have is that at the end of June this year the cash balance available was approximately $750m. As far as I can tell, in the month of July alone the Government ran a deficit on its cash position of $650m. It is my conclusion from what I can find out that at this point of time the Government has run out of money. Therefore we are talking about the question of where the money lies in Australia. Very largely the money lies in the savings pools in this country. I refer to the accumulated savings of people who have invested in life insurance, the accumulated savings and surpluses of the insurance industry and the accumulated savings in the superannuation funds and building societies. That is where the saving lie. If we understand that Australia traditionally is one of the high savings countries of the world- it has been so consistently and has financed something like 90 per cent of its whole program of investment out of the savings of its own people- the possibility that those savings could come under some kind of assault by compulsion from a government that had run itself out of money is quite alarming. Therefore this Australian Government Insurance Corporation Bill has to be considered in that final context. Is it a proposal to have access to the savings pools that are available by some form of compulsion in order to fund extravagance and the running out of cash?
– The short answer is no.
– I am glad to hear that. I would be glad to hear it from the mouth of the honourable senator’s Prime Minister (Mr Whitlam) and Treasurer (Mr Hayden) at some important time that the honourable senator might organise. I believe at the time of the overseas loan affair that lying within the context of that debate and that proposal was some measure to fund the massive deficits of Australia by some kind of pseudo overseas borrowing for disguised purposes. Now the matter is quite simple. The Government has been spending a great deal more money than it has been raising. It will need to get that money either by printing money and causing inflation, by running a program of shortterm credit on 13-week and 26-week Treasury bills and notes, or it will seek to borrow properly from the Australian community by attracting community savings in a proper style by way of loan raisings in a traditional form. It ought not be possible by any government device in any way for such savings to be attracted compulsorily. It is for that reason particularly, as well as many others, that I and the Opposition are totally opposed to this measure. We were similarly opposed to the National Investment Fund Bill for the same sort of rather dangerous possibility relating to compulsion in respect of savings.
Accordingly I suggest to my colleagues in the Opposition that this is a measure that we could well do without. A massive amount of material is available containing proposals to handle problems in the national disaster area. The Government should take that material, study it carefully and then come forward with proposals that will handle the problem in a proper style in the community in which facilities already exist to do it. The Government should involve itself voluntarily in this exercise with the people now engaged in insurance in Australia.
-I can only express keen disappointment at the attitude of the Opposition to this measure, because its attitude is against the public interest in 3 principal respects. Firstly its attitude will deprive the public of the benefit of competition in areas of insurance in which competition is desirable and will leave the public at the mercy of private insurers, many of which obviously are ailing. I make no blanket condemnation of insurance companies. I simply state facts and for particularity I refer to a lot of the evidence that was given publicly to the Senate Standing Committee on Constitutional and Legal Affairs in relation to the National Compensation Bill. Secondly, the attitude of the Opposition in opposing this measure denies the public the benefits of natural disaster insurance which private insurers for obvious reasons are unable to provide. Unfortunately this nation has experienced in recent years a number of natural disasters, in particular the Queensland floods and the Darwin cyclone, in relation to which, if it had not been for the beneficient attitude of this Government, many people would have experienced personal financial disaster. It is no answer to that criticism for Senator Cotton on behalf of the Opposition to say that the insurance industry would like to discuss with the Government a proposition. Again, that is too little too late. Thirdly, the attitude of the Opposition fails to stem the trend towards an unhealthy preponderance of foreign ownership and control of insurance interests, and I will give some details of that in a moment.
I have referred to the attitude of the Opposition. Of course, that attitude was not declared without considerable vacillation and indecision on the part of the Opposition. Let me remind the Senate of the chronology of the matter. The Bill was first introduced into the House of Representatives on 23 April. In the first part of May the Press of Australia, particularly the Melbourne Age on 3 May, carried stories indicating a rift within the Opposition over its attitude to this Bill. It was argued, in the Press, and it has not been denied, that the Opposition was undecided as to whether it should seek to amend this Bill in accordance with some of the matters indicated by Senator Cotton this afternoon and indicated also in the House of Representatives or whether it should oppose the Bill in toto. On 15 May in the House of Representatives the Opposition sought unsuccessfully to defer consideration of the Bill in that House until the Budget session, and it was only this week that the Opposition in a public statement declared that it would use its numbers in the Senate to defeat this Bill. In reaching that view I would maintain that the Opposition has succumbed to the pressure of vested interests which underly the opposition of the private insurers to this measure.
By way of preliminary consideration of this Bill I suggest that 2 questions must be asked and must be answered. The first is: Is the private insurance industry in a position to claim that it has the right to exclude the State from operating within the insurance field? I would submit that the answer to that question is surely no. I draw the attention of the Senate to an article published in the Insurance Record quite recently containing an address by Dr Diehl the Deputy General Manager of the Swiss Reinsurance Company in Zurich, delivered to the World Insurance Conference in London in March 1974. 1 will quote 2 passages from it. Dr Diehl made it perfectly plain that as the public and the insurance industry faced the 1980s it was quite clear that there had to be a government involvement in the insurance industry. I quote from the second page of his article appearing in the Insurance Record. He said:
Insurance, as we all know, is only one form of risk management. There are other forms like ‘avoiding’ and ‘reducing risks’ and ‘self-insurance’. To panic at any government activity in the area of ‘risk’ is just as unsuitable a response as to cry for help from the state as soon as any difficulties appear.
On the third page of that article, Dr Diehl said:
What the insurance industry is still practising in many places- nothing more than performing the function of distributing losses among the group of insureds- will most probably no longer be enough to convince the critical consumer of the 1 980s and it will give him another case for saying that this is actually something the state could do, at least in certain classes of business.
-Who is Dr Diehl’
-He is the Deputy General Manager of the Swiss Reinsurance Company operating in Zurich, Switzerland, and he was addressing the World Insurance Conference in London in March last year.
– What is his experience?
– I would have thought that, in view of the history of financial institutions in Switzerland, if one reached the position of Deputy General Manager of the Swiss Reinsurance Company one would be no slouch with regard to insurance or reinsurance.
– They take it on rotation here, do they not?
– If the honourable senator would like a biographical account of the achievements of Dr Diehl I will let him have it at some later stage, but the fact that he opens the way in his address for the involvement of the state in insurance is not insignificant. It will be remember that he is a reinsurer, and I will say something about reinsurance because that is one of the great defects of the Australian insurance industry at the moment.
– What form of involvement did he advocate?
-Time is limited on Wednesday and I will be delighted to answer questions from the honourable senator on Thursday. The second question that ought to be asked and answered is: Does the private insurance sector fulfil the needs of the public at present and is it likely to be able to fulfil those needs as we approach the 1980s? For a number of reasons which I will discuss, I submit the answer to that question is clearly no. The first reason I say that is that it is increasingly acknowledged that private insurers are much more interested in obtaining moneys for investment- there is nothing wrong with that- than in providing the insurance cover that the public needs and that the public will need because the public is becoming much more critical in its contacts with business interests, as is instanced in the field of consumer protection. In other words, the development of the insurance industry along the traditional lines that we inherited from the British insurance industry means that service is subordinated to the availability of investment funds. That is proved by the fact that the main thrust of Senator Cotton’s speech this afternoon was that the private insurance interests have been able over the decades, and centuries perhaps, to amass capital funds to such an extent that they command approximately 10 per cent of the capital investment funds available in Australia today.
– These are Australian people.
-The Australian people? Senator Cotton will find that the figure is not very different in relation to the other matter 1 have mentioned. Of course, the Australian people have funds available for investment and I take Senator Cotton upon his point at this stage. I submit that there is not the slightest validity in the suggestion that this Bill, as he says, provides for a form of compulsory exaction of the savings of the people. There is nothing in the Bill about that. If in fact the Corporation, if it were established, were so successful that any significant part of the savings of the people of Australia found its way into the hands of the Corporation that would be a tribute to the Corporation’s efficiency and an indictment of the present insurance system. It has never been the intention or even the hope of the Government that that position would emerge to that degree. On the same point I would remind Senator Cotton that it is quite false to suggest, as he did, that the Australian Government is seeking by this measure to be able to assist its own financial position, its cash position. The premiums are the property of the Corporation, and the only extent to which the Government has any interest in or power over the funds of the Corporation lies in the financial provisions, to which I shall refer later, under which the level of profit that ought to be aimed at by the Corporation can be determined by the Minister. Those provisions do not justify the claim of Senator Cotton that this Corporation is in effect a vehicle for the compulsory exaction of the savings of the people. Nothing could be farther from the truth.
To get an indication of the extent to which the private insurance industry, by its monopoly of insurance, is able to attract to itself for reinvestment the savings of the people, I refer to the figures that were given officially by the Minister for Overseas Trade, Mr Crean, when this matter was debated in the House of Representatives. They appear at page 2360 of Hansard of 1 5 May. The figures the Minister revealed were these: Life insurance premiums were running at about $2,000m per annum, general insurance premiums were running at about $ 1,500m per annum, and the cost of collecting and administering that amount of $3,500m was $900m. That means that in a completely uncontentious area it costs $ 1 to administer each $4 of premiums collected. Can that be said to be efficient? Those figures would be very much in line with the figures recently given publicly to the Senate Standing Committee on Constitutional and Legal Affairs to which I referred earlier.
The second point that arises under the question ‘Are the private insurers fulfilling the needs of the public?’ is that of foreign ownership and control. It is in that area that for 23 years while the present Opposition was in government it let a situation develop about which it can be said that the private insurance industry within Australiaat least, so far as general insurance is concerned and not insignificantly so far as life insurance is concerned- is very largely in foreign hands. What do the figures show? The best figures of which I am aware on that point are official figures of the Australian Bureau of Statistics. The general insurance figures indicate that for 1973-74 the level of foreign control was 45 per cent and the level of Australian control was 55 per cent, but a little over 20 per cent of that 55 per cent represented the activities of State government insurance enterprises. Those figures do not include reinsurance, to which I shall refer specifically in a moment. Because of the existence of mutual life companies in Australia, the position with respect to life insurance is somewhat better; but even in that field, where the lives of Australians are concerned, foreign ownership accounts for 36.8 per cent of life insurance cover for the 1 3.5 million people in Australia.
– What is the point you are trying to make?
-The point I am trying to make is that it is about time something that bore the label of Australia was intruded into the insurance industry and the massive sellout to foreign interests was not continued- and the sellout is continuing. Senator Webster should look at the figures that were quoted by the Prime Minister (Mr Whitlam) in the House of Representatives. They appear at page 2375 of Hansard. Let us look at those figures and see what is happening.
– You would rather sell out to the Arabs.
– You would rather sell out to $4,000m worth of petro-dollars.
– It is pretty clear that what I am saying is unpalatable to Opposition senators. When they have to intrude arguments about $4,000m worth of foreign loans when I am giving formal statistics in relation to the degree of control of the Australian insurance industry. Opposition senators prove that they have gravel for matter.
At page 2375 of the House of Representatives Hansard some interesting figures were given. They were extracted by the Prime Minister from evidence that was given by the Life Insurance Commissioner and the Australian Actuary to the Senate Select Committee on Foreign Ownership and Control. They revealed the startling fact that the number of Australian owned or controlled life companies fell from twenty in 1946 to thirteen in 1 97 1 , while the number of foreign owned or controlled companies increased in that period from two to thirty-five. The trend continued after that, and by December 1973 the number of foreign owned life offices had increased again and the number of Australian owned offices stood at twelve while the number of foreign owned offices was thirty-six. Is that a situation which the Opposition wants to continue? Does it want the position to reach a stage at which the preponderance of the insurance interests of this nation, including life insurance interests, is held overseas? The answer should be ‘yes’ or ‘no’; there is nothing in between.
– Do you hate overseas people?
– I do not hate overseas people, but I do like Australians. Let us look at the reinsurance position. It really shows the extent to which the insurance interests of Australia are held overseas. It is impossible to get statistics- I have sought them, but I have been told that they are just not available- on the extent of reinsurance so far as Australian premiums are concerned. Reinsurance, of course, is much greater in the field of general insurance than it is in the field of life insurance, although it exists in life insurance. One knows from experience- I have had some experience in these matters- that there is a very high degree of reinsurance. Where does that reinsurance go? It goes outside this nation; we know that. The significant point- I understand this to be true, but very little, if any, publicity has been given to it lately- is that the only body which has shown any interest in creating a reinsurance industry in this nation is the Queensland State Government Insurance Office.
– What is so bad about all that?
-There is nothing so bad about all that, so far as Queensland is concerned. If Senator Webster wishes to espouse a situation in which the insurance of Australian interests is held largely overseas, let him get up and do so unequivocally.
– I would rather that than induce the aid of the Arabs.
-We are not talking about the Arabs; we are talking about the general insurance industry. If Senator Webster looks at the statistics he will find that the Arabs are not involved in this field at all; it is partly the United Kingdom and partly the United States, with a few other smaller interests being involved.
– You will induce them in if you get a chance.
– Induce who in?
– Any overseas body- going by the way you use an overseas body for your own public relations.
The ACTING DEPUTY PRESIDENT (Senator Davidson)- Order! Senator Everett is addressing the Chair.
-The point, Mr Acting Deputy President, is that the Opposition would be content with a situation in which we in Australia continued to play a role of subservience to foreign business interests.
– Subservience be blowed!
-Of course it is subservience. Does Senator Webster not want the profits or the produce of the investment of the people’s money to ensure within this nation to the benefit of its people? The Opposition, of which Senator Webster is a member, is selling out the farm. I leave the matter of re-insurance because obviously it is rather a difficult problem for the Opposition. One might ask: If the Opposition is so anxious to cast off the insurance liabilities, the risks and the investment moneys, to overseas, why did it bother to enact the Foreign Takeovers Act in 1971, 1 think it was? But no doubt the Opposition will relationalise that. It is difficult for me to recollect legislation which has been the subject of so much distortion and so much untruth as has been the case with this Bill.
It has been said over the months and it was maintained this afternoon by Senator Cottonbut I notice some slight retreat- that the Trade Practices Act would not apply to the Corporation. Where is the authority for that statement? There is no mention of the Trade Practices Act in the Bill; there is no mention in the Trade Practices Act of an exclusion in favour of this Corporation. Then it was said- and this was the daddy of them all- that this Bill was the beginning of nationalisation of the insurance industry. What a lot of nonsense! Was the creation of Trans Australia Airlines beginning of the nationalisation of the aviation industry?
– It was intended to be.
-Senator Carrick may have been privy to the political discussions at the time. I do not know. I regret that I was not. Was the enactment of the banking legislation the precursor of the nationalisation of the private banks? They all seem to be doing very nicely, thank you, Mr Deputy President, and each of them has been in existence for something like a quarter of a century. It was said in the House of Representatives by Mr Lynch in delivering the major speech for the Opposition in that chamber that the provisions of this Bill involved the unlimited availability of capital to this Corporationthat is capital provided by the Government. He conveniently forgot to mention that under clause 36 (2) (b) the only amounts of capital that can be appropriated to this Corporation other than the initial amount of $800,000 must be sums which are appropriated by Parliament for the purpose. Parliament has complete control. To suggest that unlimited amounts could be made available is a distortion of the truth.
The final matter I should mention in that context is what I would maintain are the tight financial provisions of this Bill so far as the Government and the Corporation are concerned. The detailed provisions are contained in Part VI of the Bill. The first requirement is the statutory requirement under clause 34 which provides that the Board must act in accordance with sound commercial principles. In other words, it is to operate on the same basis as any private insurer should operate. The financial policy of the Corporation is determined by clause 35 of the Bill. In effect the only involvement of the Government is that under clauses 36 and 37 the Government has some say in determining what is a reasonable return on the capital of the Corporation, but under clause 35 (2) the Board is required to pursue a policy directed towards making, in each financial year, profits sufficient to enable the Corporation to pay to Australia, out of those profits, an amount equal to the percentage of its capital determined by the Minister in respect of that financial year. That is the only way in which there is interaction between the moneys of the Government and the moneys of the Corporation. To suggest that because of those provisions the Corporation has an unfair advantage over private industry is, in my submission, a distortion of the true positions.
Before leaving the distortion aspect I just mention that I will leave to others a discussion on the expensive campaign conducted by insurance companies in which the companies exploited their captive labour force- their own employees- who 1 think got more laughs out of walking around the streets waving little flags than in sitting at the desks of their employers. I think they enjoyed themselves.
The point that has to be borne in mind in relation to this Bill is that for decades State governments have been involved in the insurance industry. They have been involved in the general insurance industry to a large degree including, in more recent decades, medical and hospital benefits insurance. There has been no cry of nationalisation in relation to that activity. Indeed, because many of the areas of State government involvement turned out to be unprofitable there has been a willingness by private insurers to accept the Government into the various fields.
– State governments.
-Yes, State governments. The honourable senator seems to draw a distinction between State governments and national governments in this context. The state is the state whether it moves under a State government banner or a national government banner. After listening to the speech of Senator Cotton I submit that the Opposition’s attitude to this Bill reflects 2 basic conservative tenets: The first is that any attempt by the state to enter a field of business or a commercial activity must be resisted; and the second is that any action by the state which might reduce the profitability of private business interests must be prevented also. The Government joins issue with each of those tenets. It believe that the Australian people are entitled, as a matter of contract, to insure themselves against the various risks of life with a government agency if they wish to do so. Assuming that this legislation were passed and that this Corporation succeeded, as I said earlier, it would be a tribute to the efficacy of government involvement in this field and would be an indictment of the private insurance industry. If the Corporation were to fail, what would the private insurers have to worry about?
This legislation has not been hurried. Its subject has been Labor Party policy for many years. The Bill was not introduced until there had been a proper investigation by an interdepartmental committee. The legislation has been before the public for a considerable time and I venture to suggest that had it not been for the expensive public relations campaign conducted by the insurers the Opposition would not be taking the line that it is taking before this Senate. This is a sound measure. It provides for national disasters and natural disasters, which are not provided for and are not likely to be provided for under current commercial practice. It is something in which the public can evince a financial interest for their own sakes and for the sake of Australia. It is a measure which I heartily commend.
-I rise to lend the support of the National Country Party of Australia to the opposition to this Bill. It is a sorry circumstance that we have to be faced with these confrontations on legislation all the time but if other Government senators believe as Senator Everett does then I can see why we are forced into these situations. The Australian Government Insurance Corporation Bill 1975 highlights this Government’s intention to expand its activities in the public enterprise system. The Bill was drafted originally without any consultation with the insurance industry and naturally caused a great furore, which continues until today. The legislation proposes a further addition to Government expenditure with no new benefits offered to the community. It is patently unnecessary and will result in a further reduction in the money available to the private sector of the economy.
The Bill cannot be viewed in isolation but must be considered in the context of the proposed national compensation scheme, the national health scheme, the national superannuation plan and the national investment fund, if legislation for it is ever reintroduced into the Parliament. Of course, the national compensation scheme has been considered by a Standing Committee of the Senate. It has recommended that the legislation be withdrawn or at least redrafted and has suggested that the legislation is possibly unconstitutional as has been found to be the case with so much of the legislation that has gone through this Parliament. Medibank has been rammed down our necks and shortly I am sure that we will all choke on it. The national superannuation plan is still on the drawing board and the national investment fund is somewhere in limbo. No one could possibly give any accurate estimate as to the cost of any or all of these proposals or how fast costs connected with them will escalate. Once again our free enterprise system is under massive attack by this Government. But that is part of this Government’s bag.
All of us recognise the need for some government participation and involvement in national disaster insurance. It is part of the proper role of government as it is part of our internal defence against fires, floods, famines, cyclones, plagues and earthquakes. However, this legislation goes far beyond that. It uses the excuse of national need as a lever to justify entry into all forms of commercial insurance. Despite reassurances of the Minister for Social Security and Minister for Repatriation and Compensation (Senator Wheeldon) this morning and at other times, the Australian Government Insurance Corporation would have unlimited and unfair trading advantages over ordinary insurance offices. For example, it could operate indefinitely at a loss and would be subsidised by taxpayers. It could offer cut rate services subsidised by taxpayers. It is specifically exempted from the provisions of the Insurance Act and Life Insurance Acts which apply to all private insurance companies strict requirements as to their solvency, their asset valuation, unpaid premiums and the provision of information. The corporation will not be subject to the State companies legislation or, despite all the reassurances, to the provisions of the Trade Practices Act. In all probability the corporation will be free of the provisions in respect of dealings in securities which will be imposed on the managers of the private companies by the proposed Corporations and Securities Industries Act.
The new Australian Government Insurance Corporation is not liable to pay tax on its incidental insurance activities such as investment as are private companies. It is not liable to pay stamp duty or fire brigade levies. The Treasurer (Mr Hayden) has the absolute right to determine the comporation’s return on capital. He could set a rate lower than any private enterprise could tolerate and the corporation could operate at unrealistically low premiums or pay unmatched benefits. On top of this, the corporation could achieve a significant cost advantage by using the operating facilities of other Federal Government departments and instrumentalities; for example, the Post Office. Unless these services were provided on a commercial basis their real cost would be hidden. The Government maintains that there should be greater competition within the insurance industry and seeks to provide this with the Australian Government Insurance Corporation. But as has been said, there are already 300 insurance companies in Australia. There are 45 life insurance companies, 260 general insurance companies and 6 State insurance offices. They have some 8 million policy holders. There is intense competition between each company now. They have been hard hit already by the policies of this Government resulting in high interest rates, high taxation and high inflation. Apart from the disaster of this Government, the insurance companies have sustained heavy claims due to natural disasters in the last couple of years.
I see a more sinister aspect in the introduction of this Bill now. Previous governments encouraged capital formation by way of tax incentives to the insurance industry. This Government proposes the exact opposite. It raised taxes in respect of life insurance companies by 3 separate measures in the 1973-74 Budget. It increased tax again in the 1974-75 Budget. This increased government revenue but it reduced bonus payments to policy holders by 1 5 to 20 per cent. More importantly, this reduced the amount of money available for investment.
Why is the Government trying to establish this corporation at a time of low business confidence when there is a major investment slump, when the corporation can only depress business confidence more and reduce investment further? This Bill smacks at the very foundation of the free enterprise system that has provided us with such a wonderful country and our Australian way of life. This Government hopes to destroy all this in the unholy name of socialism by creating an insurance corporation to provide unfair competition backed by unlimited government money, manipulated at the whim of a socialist Treasurer. The Opposition opposes the Bill.
-As I understand it, the Senate is not debating the divine of other qualities of socialism but the Australian Government Insurance Corporation Bill. The purpose of this Bill is to establish an Australian Government Insurance Corporation to carry on the business of insurance in Australia. I want to refer to the essential features of the Bill because little of that has been done in the course of the speeches from Opposition spokesman. The corporation is to be managed by a board and it will be subject to the Insurance Act and the Life Insurance Act. It is required by clause 34, as Senator Everett pointed out in the course of his speech, to act in accordance with sound commercial principles and it is guaranteed by the Australian Government. A further important clause, clause 14, provides for the board of the corporation in certain circumstances to enter into special classes of insurance in the national interest. There has been some speculation as to what might be contemplated in this direction. I will refer later in my speech to some of the things which may be contemplated under the provisions of that clause and where the inadequacies of the insurance industry in Australia at present have become quite manifest. Indeed, they have become manifest not only on the basis of performance in regard to what the insurance companies have undertaken to do in the past but also manifest on the basis of comparison with the classes of insurance risk which have been covered in other countries.
I mention these essential features of the legislation at the beginning because it is important that people should be clear on what this is all about. I have referred to these essential features of the Bill because this and nothing more is what is involved. I think that it is necessary to do that because of the quite hysterical reaction and misrepresentation of this legislation by Opposition vested interests, whether they be in the Senate chamber or in the outside insurance industry. That hysterical opposition has rivalled that which was engendered in relation to Medibank, which is now alive and well and serving the Australian people. I know that Senator Sheil has a special concern about this aspect. He went out of his way to mention it. But I think that the majority of the Australian people are satisfied with what Medibank is doing for them and, except in those States where there has been obstruction to the program, it has been saving considerable amounts of money each week in respect of the services it offers to the people.
Of course, much of this hysteria to which I have referred has been engendered by the conservative management of the insurance industry which is unable in many respects to cope with its own problems. It is unable to cope with problems because it has not adapted, as the insurance industry in other countries has tried to do, to the challenges that it faces in the 1970s. Let me give some examples of the types of hysteria which have been engendered in opposition to this Bill, and the source of that activity. I refer first of all to an Australian Mutual Provident Society circular of 1 4 March 1 975 which was sent to all managers of that company together with advertisements for a program titled ‘Mutual is our Middle Name’, a sales program. That circular asked managers to engender opposition to the proposed Government legislation. In the course of describing what should be done the circular called for confidentiality and the handling of this matter in a fashion- and I quote- ‘less likely to incur charges of political involvement’. On 24 April of this year the Life Officers Association sent a letter to all field staff suggesting that they should lobby members of Parliament. They seem to have had some success insofar as the Opposition is concerned, although I understand the Opposition attitude to be in conflict with a view expressed by the new Leader of the Opposition (Mr Malcolm Fraser) shortly after his election. That circular even enclosed a draft letter which it was suggested be sent to members of Parliament.
On 30 May this year the Transport and General Mutual Life Society Ltd sent a circular to all officers advertising ‘a mass meeting’ at the Dallas Brooks Hall in Melbourne. I shall quote from that circular to indicate the source of much of this opposition. The second last paragraph reads:
Mr Barnett has stressed that this is a completely independent group of insurance workers, and management are not in any way associated with the organisation of this function. However, the Sub-Committee has promised its discreet full co-operation to ensure that both protest meetings will have maximum attendances. Indeed, this is essential to the success of these events.
It is signed by the convenor for the T and G Mutual Life Society Ltd. That is the sort of activity to which members of Parliament and indeed anybody who has sought to engage in a rational discussion of this question have been subjected in the last few months. I think we should try to avoid that hysteria in the course of this debate and look at the issues which are involved. That is why I have referred specifically to particular provisions of the legislation.
It is true, of course, that the Australian Government Insurance Corporation will be in competition with private enterprise insurance and that, added to the protests and the lobbying to which I have reffered is the basic source of the opposition on the other side of the Senate to this legislation. The Australian Government Insurance Corporation will be in competition with private enterprise insurance. Just as State government insurance offices are in competition with private enterprise insurance, the New Zealand Insurance Corporation is in competition with private enterprise insurance, the Commonwealth Bank is in competition with private trading banks, Trans-Australia Airlines is in competition with Ansett Airlines of Australia and so on, the Australian Government Insurance Corporation will be in competition with private enterprise insurance. None of the endeavours to which I have referred has justified the doomsday prophecies which were uttered by mealymouthed conservative spokesmen for free enterprise when the pieces of legislation establishing those enterprises were introduced.
One must ask what the Opposition objects to about competition? What does the Oppposition understand by the notion of competition? I sought some guidance from the Liberal Party platform about what the Liberal Party understands by the notion of competition. I read it to the Senate:
Liberals believe competitive free enterprise is the economic system which most effectively ensures that individuals can exercise freedom of choice and initiative. Because free enterprise responds to the wishes of the consumer, it best provides the quality and variety of goods and services desired by the individuals who comprise the community. Liberals also recognise that the free enterprise system can achieve these goals only where it accepts full social responsibility and where the conditions exist for a free exercise of choice. These conditions include honest competition, a wider knowledge of products on the part of the consumer, and the protection of the consumer against oppressive and overbearing sales techniques.
That is what the Liberal Party believes about free competition, the inequities of which we have heard in the course of this debate. Let us look at the insurance industry in the light of the Liberal Party criteria. I have said that this Corporation will compete with private industry. Are there any serious spokesmen on the Opposition side who will get up in the Senate and, apart from bleating platitudes about the virtues of competition without reference to their own platform, say that the insurance industry reflects full social responsibility? Does it reflect full social responsibility in its investment policy which has provided for numerous office blocks in the cities of Melbourne and Sydney which are half empty but has deprived the housing market of necessary funds?
Is that full social responsibility? Does the Opposition believe -
– Largely tenanted to your Government.
– It does not matter by whom they are tenanted, Senator. Will Senator Carrick get up and expound the virtues of honest competition in relation to the insurance industry? Will he get up and say that the consumer is given the full benefit of a wide knowledge of range of products available by the insurance industry? Has he not heard of the small print in insurance policies? Has he not had constituents come to him and complain about the small print in insurance policies? Do those consumers have a wide knowledge of the various products available to them? Will Senator Carrick or any other Liberal senator get up and talk about the importance that the Liberal Party attaches to the protection of the consumer against oppressive and overbearing sales techniques? They may be able to do so in the Senate, but let them say to any policy-holder in Australia that the insurance industry is free from oppressive and overbearing sales techniques and they will be laughed out of the room.
I ask members of the Opposition to consider fully the criteria which they apply to the question whether competition is free and fair or not. I ask them to apply their own criteria to the efficiency of the insurance industry and to ask themselves whether the competition is real in this industry and whether the competition ought to be encouraged or not. Is it giving the best possible service to the Austraiian consumer or is it afraid of further competition? I endeavour to answer these rhetorical questions on efficiency and the validity of competition and so on by quoting from some of the industry’s spokesmen. First of all I quote from the Insurance and Banking Record of this year. Reference is made to a letter by Mr D. Green of Hartford-Monarch Insurance. He said:
Sensible underwriting is the name of the game with more emphasis put on underwriting profits and less on cash flow for investment purposes.
We have heard a lot about cash flow for investment purposes in this debate. This view about what the name of the game is comes from an insurance industry expert. Let me refer to some other experts. I am quoting from articles in the same journal. The first is by Dr W. Diehl Deputy General Manager of the Swiss Reinsurance Company. He said:
I would refer you to a -
– Double deal.
-I am talking, Senator, however unpalatable it must be, about whether the insurance industry delivers to the consumer, which is of such concern to the Liberal Party. Dr Diehl stated:
I would refer you to a survey conducted by Fortune magazine in October 1973, covering the views of 500 major U.S. firms on ‘How major industrial corporations view property and liability insurers’. Among other things, it shows that a large percentage of the companies surveyed expect more loss prevention service, higher deductibles and more flexibility than they are getting from their insurers.
That was said in the context of an analysis of the Australian insurance industry. Then in October 1974 in an article in the same journal Mr Gamble, the President of the Australian Insurance Institute, referring to the standard of management in the insurance industry, stated:
In this context we will need more than ever highly qualified human resources, both practically and academically. I see a risk of the disappearance of chief executives drawn from the ranks in favour of professional managers unless we get the balance of insurance men with broad experience in finance, current affairs, and human behaviour to take their place as leaders in the industry in the immediate future.
What he was putting clearly there was simply that the industry has not responded to the challenges of the present. I refer also to a comment by Mr J. A. Neave, General Manager of the Mercantile and General Reinsurance Company Ltd, who said this:
One may perhaps be forgiven for wondering sometimes if insurers have not become so engrossed in the day-to-day business of marketing that the selling of their policies may be compared to the retailing of shoes or groceries, and wondering also if things have not reached a point at which so much emphasis is given to the preparation of the product and to its marketing that the science of underwriting, the essential background to the business and the service it gives, has not been relegated to a position of secondary importance.
Those are comments from an insurance industry journal. They are comments from experts in the insurance industry who are obviously concerned that the industry is not meeting the challenge of the 1970s. They hardly indicate a great degree of satisfaction with the state of the industry, and that is not surprising because the industry has simply failed to adapt. The fact is, of course, that the industry is obsessed- as one imagines Senator Cotton is, from some of the comments he has made- by the idea of cash flow for investment, which is contrary to the views of the experts to whom I have referred. Above all, the industry is concerned about this at a time when it is also engaged, for that reason, in opting out of many areas of important social responsibility.
The insurance industry by its public propaganda rejects the concept of the Australian Government Insurance Corporation, while at the same time it becomes more and more selective in the risks it is prepared to undertake. If that process goes on, some sections of the population will find it impossible within the next few years to get adequate cover for many risks. I am not talking off the top of my head when I say that the insurance industry is contracting out of many areas of its social responsibility. As an example of what I mean, I quote from a circular to managers of the Eagle Insurance Company, one of the top 10 companies in Australia, relating to the question of public liability insurance. That circular, which was sent to all branches on 2 May 1975 states:
Although Public Liability insurance was for many years one of the profitable portfolios for insurers, it becomes necessary today when liabilities losses are mounting, to select our acceptances more carefully than ever before and ensure that each risk is adequately rated if the portfolio is to return to serving the Company profitably.
A review of classifications has been carried out and the new expanded Decline List is attached for immediate use. Where the Public Liability is declined it will of course be necessary to decline any associated Products Liability insurance at the same time.
The circular goes on:
As the Decline List is mandatory, under no circumstances may branches make acceptances or offer renewals for any listed occupations.
The circular then goes on to set out a draft letter to be sent to clients which states:
Following a review of our Public Liability insurance portfolio, it has become necessary for us to reconsider our existing commitments in certain classes of risk, the collective experience of which has caused difficulties for us.
The letter then goes on to state that the company will have to cancel the policy accordingly. Now, the decline list which is attached to that circular, the list of business out of which that insurance group is opting, is really quite enormous in the public risk area. It covers- I am just picking out a few- boot and shoe factories, boat-builders, building demolishers chemists and druggists, cinemas, electricity and power suppliers, electrical appliance manufacturers, plastics goods manufacturers, polish factories, printers ink factories, pop concerts in enclosed halls, porcelain and pottery manufacturers, produce merchants, secondhand dealers, sewerage and water supply authorities. Those are just a few examples taken from that company’s decline list. In those areas the company is now declining to underwrite public risk insurance.
The point about competition that was being debated earlier is an interesting one because that company can scarcely be said, on the basis of that document, to be providing a competitive service in the interests of the Australian consumer. When honourable senators opposite talk with great emphasis about the effects of this legislation upon the private sector, they might pause for a moment to think about how the manufacturers of pottery, how the managers of the various factories referred to in that document, how all those industries in the private sector feel about the fact that they cannot now get public risk insurance from that company, and indeed from many of that company’s competitors. That is something which I should have thought would concern the private sector. Of course, it concerns the private sector because it wants to be able to receive insurance and it wants to be able to receive it from one of the 47 competing companies which are currently engaged in the industry.
– Why do they refuse to cover those areas? What is the reason for that?
– The reason for refusing it is set out at the beginning of the document I read. It is becoming unprofitable, and for that reason they decline. That is competition. What I am talking about is the delivery to the consumer. I am not talking about the profitability of that particular company, I am talking about whether the insurance industry is delivering to the consumer. That is the basis of the argument which has been raised on the other side of the chamber. There is no need for the Australian Government Insurance Corporation, it is being said, because the industry can cope with all of the business; there are already so many competing companies that there should not be another competitor. That is why I referred to the platform of Senator Sir Magnus Cormack ‘s Liberal Party, which deals with the question of what are the right criteria for private enterprise competition. One of those criteria is the public good and delivery to the consumer. They are both in your platform, senator.
– Do you mean that no one who manufactures a lavatory pedestal will get any insurance anywhere?
-That may be the situation, but if this legislation is passed the manufacturers may be able to get it from the Australian Government Insurance Corporation. There is one other matter I wanted to mention. It is possible that the Australian Government Insurance Corporation will offer the competition that is so much needed in those areas of declining risk undertaking in the private industries to which I have referred. Under clause 1 4 of the Bill the Corporation can offer insurance in other areas of national importance which the Minister, in conjunction with the Board of the Corporation, considers it desirable for the Corporation to enter into on a commercial basis.
– Could you give an instance of that?
-As Senator Wright has asked me for an instance of such, I will give him one. The instance to which I refer, of course, is crop insurance. Crops are things that farmers grow. Crop insurance is well known in the United States of America where competition apparently produces the goods a little more satisfactorily. It is well known in many other countries. Let us listen to what the Green Paper on Rural Policy in Australia stated about crop insurance in Australia. It referred to the main type of crop insurance in Australia.
– So you are going to subsidise them with insurance and refuse them bounty on superphosphate. You want to fertilise your mind.
– If Senator Wright would just listen for a moment, instead of giving vent to such expressions and grunting away about superphosphate or natural manure or whatever he is talking about, he would hear what the Green Paper on Rural Policy in Australia states. It states that generally speaking all types of crop insurance are not available in Australia. It refers to the fact that the Australian Wheatgrowers Federation has sought this and then it states in a subsequent paragraph:
On the other hand all-risk crop insurance is available in the United States, Canada, South Africa, Japan, Sweden, Israel and a number of other countries. In some countries such as Sweden and Japan crop insurance is compulsory: in others including the United States and Canada it is voluntary. In most cases the administrative costs of such schemes are subsidised by the government.
I make that point because it seems that the competitive insurance industry in those other countries can cater for these sorts of things. Apparently it has never been envisaged that the insurance industry in Australia can cater for these sorts of things profitably. I refer Senator Wright to the relevant sections of the Green Paper, which are paragraphs 4.75 to 4.92. If Senator Wright likes to read those sections of the Green Paper on Rural Policy in Australia he will find the references I have made. The point I am making is that the insurance industry in Australia not only is not undertaking areas of risk which are undertaken in other countries- and has never done so- but also is contracting out of the area in which traditionally it has assumed some degree of responsibility.
Senator Wright and others know the attitude of the insurance industry on matters such as the national compensation scheme. The alternative suggested by the private industry to that scheme simply involved the concept of the insurance industry taking the cream and the national government picking up the tab for the unpalatable or less profitable section of compensation and accident insurance. I am amazed at the Opposition’s attitude to this legislation, firstly, because I think it is contrary to the expressed view of the Leader of the Opposition (Mr Malcolm Fraser) after he assumed power and, secondly, because I have read to the Opposition the Liberal Party platform on the desirable criteria for competition in any industry. Not one member of the Opposition will talk about those criteria and the application of them to the insurance industry, because they cannot do so. They know that that is perfectly true.
The argument about competition is no longer valid if one examines the position of the insurance industry in Australia. It is not valid because the industry is not competing in its traditional areas and is not prepared to compete in new areas. If it is not prepared to compete and the Australian Government Insurance Corporation is prepared to compete, then the Corporation ought to be given the chance to do so. That is all that this legislation is about- giving the Australian Government Insurance Corporation the chance to offer the benefit of the Corporation to the consumer in Australia, to the small policy holder, to those who want to cover risks which the private industry does not cover and to those who may be in areas where national disaster problems are involved. In all those areas in which the average Australian might benefit from a degree of healthy competition which the Corporation can offer, it is clear that the Corporation should be given a chance. That is all the Government is asking. In years gone by there have been many criticisms of proposals by this and other Labor governments. We do not hear much about them now. I appeal strongly to the Opposition, presumably in vain, to consider that that is really what the legislation is about.
It is really demeaning for the Opposition to follow the rather hysterical and misleading criticisms which have been made of this legislation by vested interests in the community. I refer particularly to the criticism that it is a measure which is designed to socialise the industry a view which I have seen expressed publicly by Senator Webster, who I understand has taken some interest in this subject. I commend the Bill to the Senate. I believe that it is in the interests of the average Australian that the full benefits of competition should be made available in this industry and that he should have a right to choose one of the existing private companies, which are gradually retracting their responsibilities, or the Australian Government Insurance Corporation as the body with which he seeks risk coverage.
– The Senate is debating a Bill under which the Whitlam Labor Government seeks to establish an Australian Government Insurance Corporation. The Federal Opposition, of which I am a member, will oppose that Bill. I am indebted to 2 Labor senators who spoke recently- Senator Button and Senator Everettfor the incentive that they have offered me. Senator Button invited us all to read the small print of the policies. Senator Everett said that this Bill has been Labor Party policy for many years and is written into the Labor Party platform. I also am indebted to the Deputy Prime Minister and Deputy Leader of the Labor Party, Mr Crean, who is recorded in Hansard as saying that there is too much competition in the Australian insurance industry at this moment, that overgreat competition is causing too much expense and that the desirable thing would be to narrow it down and rationalise it. I want to read the small print, and so I do.
– I was referring to the small print on insurance policies.
-Oh yes; naturally Government senators are nervous when I hold up a copy of the May 1975 Australian Labor Party Platform, Constitution and Rules as approved by the 31st National Conference at Terrigal. Now we will see what have been Labor Party policies for many years. Let us see whether Senator Button denies them. Under the heading Economic Planning’, paragraph 5 states:
To achieve Labor’s objectives, establish or extend public enterprise, where appropriate by nationalisation, particularly in the field of banking, consumer finance, insurance, marketing, housing, stevedoring, transport and in areas of anti-social monopoly.
What is Labor’s objective? It is:
The democratic socialisation of industry, production, distribution and exchange to the extent necessary to eliminate exploitation and other anti-social features in those fields in accordance with the principles of action, methods and progressive reforms set out in this Platform.
I turn to the latest of all decisions, which is a resolution on this matter which was adopted at Terrigal. Perhaps Government senators will tell me that it is not true. I wish the Minister for Repatriation and Compensation (Senator
Wheeldon) were here. Unless I am wrong, he indicated at question time that under this legislation he would be willing to make takeover bids for insurance corporations now in existence, including State government insurance offices. The policy of the party is as follows:
Conference requests the Federal Labor Government to adopt a deliberate policy of making takeover bids in key sectors of Australian manufacturing and commercial activity.
So when I look at the small print in the policies and when I look to Senator Everett and Senator Button, to whom I am eternally grateful, I find that quite clearly beyond denial the Labor Party’s most up to date policy is to nationalise insurance and to move into the commercial field in takeover bids. In recent weeks the Minister has said that such would be his policy. To give the lie to all this nonsense about why the Labor Party wants to move in and to give the lie to the thought that it wants to add more competition, Mr Crean, who is an honest man and who has paid a great penalty for his sin of honesty, said in his speech on the Bill that there is too much competition in the Australian insurance industry, and there ought not to be.
– We agree.
-A11 right. So it follows perforce that the aim is to reduce the competition. I think it was Senator Everett who asked whether we object to the Trans-Australia Airlines. I interjected that we objected to the intention of TAA when it was introduced, which was to nationalise the airlines. Let me say that there is a TAA today. In the States there are government insurance companies. So, QED, if it is good to have a pacesetter and if these government insurance companies can keep the game honest, they are there already. The truth is that the Labor Party, in its doctrinaise socialist soul, wants to seize control. Lest it be said that I am kicking the socialist can I call on another person, the Prime Minister- or when I last heard he was. Gough Whitlam said quite unashamedly in his Fabian lecture 4 months before he became Prime Minister that his intention was to bring about democratic socialism in Australia and that he would use sections 5 1 and 96 of the Constitution to do so. To those who say that they are not intending to nationalise because they cannot under the Constitution, I read the small print in the policies again.
– Read the Bill.
-Senator Button, I will read the small print. This is what Mr Whitlam said:
It would be intolerable if a Labor government were to use the alibi of the Constitution to excuse failure to achieve its socialist objectives- doubly intolerable because it is just not true that it need do so.
Here honourable senators opposite are saying in parrot fashion: ‘Of course we will not nationalise ‘. Yet Mr Whitlam said, again in small print:
My basic proposition is this: If section 92 is held up as the bulwark of private enterprise, then section 96 is the charter of public enterprise, and section 51 the key to national responsibility and national regeneration.
In the other place Labor Party member after Labor Party member said: ‘We can do this. We have the power to do it under section 5 1 of the Constitution’. That is true because section 51, placitum (xiv.), of the Constitution gives the power to the Commonwealth. It refers to insurance, other than State insurance; also State insurance extending beyond the limits of the State concerned’. Under the corporation power the Government has further powers. Lest anyone believes now that this is not a government bent on socialism, lest anyone believes that our Prime Minister is just a clever fellow surrounded by incompetents or radicals, I direct him to the Fabian lectures in which Mr Whitlam came out as the pacesetter, as the man urging with impatience that in the first term of government the Labor Party must bring about total radical, socialist change in Australia. He argued that others said he could not do it but he would prove he would do it. He said:
It is not true that we cannot change the face of Australia in the first 3 years. We will do so.
He went on to argue that in fact he would bring about a democratic socialist Australia. He set out exactly the things I said. In that lecture he went on to pose something that is now accomplished. He said that the first act of traditional nationalism of the party in its first term was nationalisation of the health services. Under Medibank it has done so. If honourable senators opposite do not believe this kind of Mein Kampf and its small print, what will they believe? This industry has, as Senator Cotton so ably said, 45 life assurance offices, some of the greatest, most efficient and most respected offices in the world. I name twothe Australian Mutual Provident Society and the MLC Assurance Co. Ltd. They are world renowned and world respected, despite the criticism of the Government. There are forty-five of them. Most of them are mutual companies. Most of them, as mutual companies, are owned by the Australian people. Eight million policies are held by the Australian people. There are 8 million policies of Australian savings on which it is the duty of those companies to get the best investments, the highest returns and the safest returns.
Despite the attempts of this Government massively in its past 3 Budgets to destroy those companies, they are still doing their job nobly. I remind the Australian people that three times tax mechanisms were brought in to obstruct the life offices in the 1 973-74 Budget; again last year and now. The present aim of a rebate system could do a great deal to restrict business in the assurance field in Australia. There is no doubt in the world about the intention of the Government. One needs only to quote what members of the Government say, although it is true that they deny tomorrow what they say today. One should remember again that Frank Crean is a person who tells the truth. It is only a year ago, before he was deposed as Treasurer, that he said:
The relatively subdued conditions in prospect in the private sector provide the first real opportunity we have had to transfer resources to the public sector.
That is what this whole ploy is about. Since the Labor Party has assumed office it has set out to take finances out of the private sector, out of the personal control of individuals, and put them into the hands of the public sector. Each time the Prime Minister speaks he gives little homilies, as he did in his Chifley Memorial Address only a few days ago and as he did in respect of the Budget last night when he said: ‘Father knows best’. He said: ‘It is not the quality of life measured if you get a higher pay packet because of your own incentive and higher earnings. You measure it better if the Government takes it from you and in its all-wise, all-knowing way spends it for you because father knows best- because the Government knows best.’ All Australians should look to the Chifley Memorial Address to see the whole of the philosophy. That is precisely what is happening here. Father knows best. Father will take the investment in insurance and assurance and turn it to what he knows best- to put the assets of investment where he thinks best- not where a mutual company acting on behalf of the Australian people thinks it ought to be. I know of no more degrading principle in any democracy than the one mouthed by the Prime Minister and repeated in the Budget. I refer to the idea that governments know better than people how they should do things, how they should spend the money on education, health and other factors. This is surely the most paternalistic, the most totalitarian and most personally corrupting doctrine that can be. Yet day after day as the Prime Minister paints himself into a corner, more and more he mouths this paternalistic doctrine.
Sitting suspended from 5.45 to 8 p.m.
- Mr President, prior to the suspension of the sitting I had made the point that the attempt by the Government to interpose this Australian Government Insurance Corporation Bill was an attempt to fulfil the Government’s platform which aims at the long term nationalisation of the insurance industry. I had made the point that the Prime Minister had indicated in his speeches that there was nothing in the Constitution to prevent nationalisation in the full sense. Here is an industry with some 45 life offices in intense competition. They are great Australian institutions, for the most part. They are mutual bodies, for the most part. They represent some 8 million Australian policy holders and they are doing a very good job, despite the efforts by the Government to suppress them and to destroy them. There are in the general industry area some 260 insurance bodies- themselves in intense competition.
I had pointed out that Mr Crean had criticised what he regarded as over-competition. Senator Cotton very rightly has pointed out that here is a prize for the socialist to capture. The assets held in the insurance field total more than $1 1,000m, which represents more than 20 per cent of the assets held by all the financial institutions of Australia. These institutions provide more than 10 per cent of the private investment capital of Australia. Therefore, they are vital to the future development of the private sector, a sector which the Government hates and wants to strangle. In the arguments that have been advanced in this matter, one argument has shined forth, and that is that here is an industry which has some 45 per cent- so honourable senators opposite say- of its companies under foreign ownership, that this is an evil and that therefore we should do something about it. Incidentally, in their speeches honourable senators opposite have asked: What could a small, little, tiny show like the Australian Government Insurance Corporation do to harm the industry, anyhow? Now they are saying: ‘We want it to intervene to take on the 45 per cent of the industry which is foreign owned’. If ever there has been an issue on which humbug, cant and hypocrisy have been demonstrated by the Government it has been over this business called foreign ownership. Here is a Government which has just been exposed as having gone to the Middle East petro-dollar market to raise $4,000m. The aim was that the Government would pay back to the Middle East $ 19,000m of hardworking Australian wealth- some $ 15,000m of accumulated interest repatriated from Australia.
– Order! I ask the honourable senator to connect his remarks to the Bill.
- Mr President, I should like your miling on this matter. If the question of the raising of loans overseas in terms of foreign ownership is not related to the Labor Government’s argument in terms of the foreign ownership of insurance companies, I cannot see any closer possible connection. Of course those matters are clearly connected with each other. Here honourable senators opposite fell. They argue with humbug -
- Mr President, I raise a point of order. The honourable senator is obviously canvassing your ruling in this matter, and I suggest that he should stay with the Bill.
– Order! I have not given a ruling, but I drew the honourable senator’s attention to the Bill, which is the Australian Government Insurance Corporation Bill. There is no mention of overseas loan raisings whatsoever in the Bill, and I ask the honourable senator to connect up his remarks with the Bill as quickly as he can.
- Mr President, I shall do so with great delight, but Government senators were not interrupted by the Chair when they raised their argument on the basis that foreignowned insurance companies would be repatriating their capital to foreign ownership overseas. They were allowed to make that connection. The attempt by the Government to repatriate $ 19,000m of Australian capital overseas by a deliberate action- an amount which in its quantum would be beyond the belief of repatriation of capital overseas for decades or indeed for centuries ahead- shows the utter humbug of the Government in this regard.
Senator Everett made the extraordinary statement that one of the reasons why we should do something to intervene in the insurance field was that the Australian people were at the mercy of many of these insurance companies, and that many of these companies are ailing. If in the highly competitive insurance field there is a series of companies which are now ailing, what would be the use of putting an additional company into the field? If there are companies ailing, they are ailing because Government intervention in the tax field has brought them to their knees.
– Aiding or ailing?
-Senator Everett said that they were ailing. He said that they were in fact weak in their structure and this was one of the reasons why we should intervene. Here we find a situation in which the Government says that it is coming in in competition, but right throughout the Bill there is no reference to competition at all. The Government is giving enormous preferment. If government competition had been the aim,
State government competition through its State government insurance agencies would have succeeded by now. All that was necessary was to increase the pace of competition. If the State government insurance agencies were efficient and if the privately owned insurance companies were not efficient, the State government agencies would not need the heavy subsidies that they now receive and the private companies would be out of business. But the reverse is true.
Here are the terms of real competition that are to be made available. The Minister says that the Australian Government Insurance Corporation and the private companies will be equal in competition. Clause 38 provides for unlimited guarantees by the Government of all liabilities of the Corporation. What private company could get such a guarantee at all? Clause 37 allows and directs the Treasurer to guarantee the borrowings of the Corporation. What private company could get such a guarantee and arrange for preferential interest rates? The Treasurer can appropriate funds from Consolidated Revenue at a preferential rate of interest. What private company can have equal competition? The Treasurer can advance capital to the Corporation without limitation. Again it is said that this will provide fair competition. Here is a company which, if post offices or any of the other Government operations are any guide, can operate indefinitely at a loss; it can sit it out, watch the others die and then revive itself. In other words, it has the power, which no private company has, to sustain itself indefinitely. So it goes on. It is exempted from a series of Acts and therefore has immunity.
I want to come back to the foreign ownership situation. The insurance companies of Australia are subject to supervision under the terms of 2 Acts, the Insurance Act and the Life Insurance Act, and those Acts are the creatures of this Parliament. Also, under the corporation’s power, this Government has total power over corporations. If any defect in a foreign owned company is revealed then the mote is in the eyes of the Government because it has the power to rectify that defect now. It is quaint because when the Government talks of foreign capital it is talking really of British companies. It appears that the British are foreigners while the people of the Middle East are not these days, they are friends. We must realise that 3 1 per cent of that 45 per cent are British companies. It is a poor and sad thing for Australia that the Government sneers at British companies which have helped to build this country. Unless we are willing to go out and attract risk capital to this country, unless we are willing to go out and bring foreign capital under proper controls to this country and set it to work at risk, this country will not grow and become great. The thought that we can lift ourselves by our shoe strings, the thought that be the use of socialist capital we can build socialist empires is the most destructive and corrosive situation that any government can conjure up. Do not let us fear this idea of foreign capital. If foreign capital in this country is bad then the government of the day is bad because it is not controlling it. Here we are with a Government that is now seeking to set up its own institution for its own socialist ends.
The arguments that have been put forward, with one exception, have no validity. The one exception is that there is a job to be done with regard to natural disasters in Australia. It is proper that the Government should come forward, and come forward soon, with a plan for the proper financing of insurance cover for natural disasters and it is quite competent for it to do so. The last point of time at which any government should intervene in private industry and in private business which is under great stress is at this time when the Whitlam Government has brought the economy to its knees. We are talking of a highly competitive industry operating now with narrow profits or even losses. It is now threatened with the addition of a monopolistic institution with all the privileges in the world and none of the pains that risk capital has to bear. This is the last point of time at which it should be done.
It would be the worst of all worlds if this Government got its hands on insurance funds for socialist purposes. In fact that is the intention of the Government. It has shown this by its various tax measures and by its various Acts in recent years. The people of Australia are entitled to use insurance, particularly life insurance, as a form of saving and as a hedge against inflation. They are entitled to have the companies concerned use the funds they invest to the very best advantage and to get the highest rewards they can. That is the only possible way in which the small people in Australia, the 8 million policy holders, can hedge against inflation. What is happening now is that this Government, having destroyed the people’s savings in the banks and having destroyed their wages, is now saying that it is going to get its clammy hands upon the investments in the insurance industry.
This is the very drive and thrust of doctrinaire socialism. It is that thrust which has brought about this calamity in Australia and which is seeking to bring about the transfer of people’s savings and of people’s endeavours from the private sector to the public sector by compulsion. It is that thrust which has reduced productivity in Australia to a negative level and has brought to Australia a rate of inflation and a rate of unemployment higher than at any time in our history except in the great depression, and unemployment here is now running ahead of the rest of the world. On top of this, at a time when private confidence is of vast importance, at a time when the need is to provide incentive to industry- indeed, the Treasurer (Mr Hayden) mouthed those words- we are faced with a suggestion which can only bring great despondency, great disappointment and great pessimism to a great industry.
There is absolutely no need in Australia for an extra government life assurance office. According to the Government’s own words some 20 per cent of Australian insurance is nationalised today under State national insurance bodies. If the Government wants to say that it can do better, then why are not those State organisations doing better? Why do they need to be subsidised? Is it that the Government in all its arrogance is saying that a Whitlam Federal Government can do better than a Labor State government? What is the Government saying? The simple situation is that the Government’s announced purpose for this legislation is not its real purpose. It does not want competition. The Treasurer says there is too much competition. What the Government wants to do is to get its hands on the industry, to get its hands on investment capital and to divert from the private sector to the public sector the valuable funds and the great decision making processes that built Australia to the nation it was before this Whitlam Government brought it to its knees. It is on these grounds that the Opposition totally opposes and rejects this measure.
– I see from the revised list of speakers that practically every Opposition senator is to join in this debate, so I will try not to keep the Senate too long. We are debating a Bill to set up an Australian Government Insurance Corporation. We have heard from Opposition senators in this debate this afternoon and this evening of their complete and utter horror at the introduction of such legislation but we have not heard yet any coherent reasons for this distaste.
Senator Cotton gave us a homily on the reasons for the deferral of this Bill on the last occasion it came before the Senate and for the need for careful consideration of all legislation. He included quotes from the House of Commons and the House of Lords. This may apply to him but it certainly does not apply to his colleagues in the National Country Party, or whatever its name is this week, who from the word go, from the very day that the Minister for Social Security, Senator Wheeldon, announced the intention to set up this organisation, said that they were opposed to it. Senator Webster, in particular, spent the time since the legislation was first announced condemning the setting up of an Australian Government Insurance Corporation although he had no idea of what was contained in the legislation. In fact some weeks ago in Tasmania a Liberal Party advertisement in the newspapers said quite categorically that the Liberal Party would appose the setting up of the Australian Government Insurance Corporation. Yet the Liberal Party only officially announced 2 days ago that in fact it would oppose this proposition.
The insurance companies announced their disapproval even before Senator Wheeldon uttered the first words stating that he intended to set up such a corporation. Its advertisements against the Bill appeared before any consideration of the legislation was possible. The Leader of the Opposition, Mr Malcolm Fraser, said in the Age of 3 May 1 975 that he was afraid that he did not appreciate those particular ads and that he especially did not appreciate them because he suspected they were written before the writers read the legislation. I think we should get away from this charade and nonsense that is going on about this legislation having been carefully considered and that certain parts of it are no good. The Liberal Party, the National Country Party and the insurance companies were opposed to this concept before they saw the legislation.
Senator Steele Hall at least stood up in this place as soon as this proposal was announced and said from the word go that he was against it. He did not go through this phoney exercise of consideration of the legislation and the pretence that meetings were held to consider whether it was good or bad. As Senator Carrick demonstrated in his speech, and as Senator Button clearly demonstrated this afternoon, the Liberal Party is opposed to all public enterprise. It is for competition between private companies but not between private companies and public companies. It is for freedom of choice of the individual but not for freedom for that individual to choose between private and public enterprise. Of course, Senator Carrick gave his weekly lecture in this place on the Labor Party platform. As he admitted, he was kicking the socialist can. However, he remembers when he was the bagman of the New South Wales Division of the Liberal Party. He remembers where the funds for that Party came from. He is only doing what comes naturally. From his spirited defence of the overseas companies we must assume that he received money from them. We all know where Senator Webster gets his money, and Senator Webster’s interjections emphasise my point. Senator Carrick used a phoney argument when he referred to attempts by this Government to raise overseas loan moneys to purchase Australia back from some of the overseas companies. This was done not to introduce to this country foreign ownership, of which he is so much in favour, but to overcome some of the problems of insurance companies.
When this legislation was introduced and, as I said before, even before it was introduced it provoked the usual Pavlovian response to any initiative by government to ensure that the citizens of this country have proper access to the facilities and opportunities in all fields of life. Any suggestion that the Government should ensure that companies act in a socially responsible way either by introducing controlling legislation or by the establishment of government enterprises to provide competition and innovation in fields such as this, as this Bill does, always brings howls of anguish, histrionic and hysterical displays in public meetings and confusion and misrepresentation in debates in this chamberand it always will. The publicity campaign in this case obviously has cost in excess of $lm. These funds were provided largely by the life assurance offices, most of which claim to be mutual companies or, as they sometimes like to put it, cooperatives of their shareholders; but none of them to my knowledge has consulted its shareholders about this expenditure. There have been radio, television and newspaper advertisements, including one grossly misleading television advertisement in which the personality involved omitted to state that he was a former prominent Liberal Party member. He claimed to be speaking for Australian private enterprise, when in fact he was employed by a Swiss company -
– We know where your untruthful Medibank advertisements came from.
– We know where Senator Webster got his money and continues to get his money. Petitions of insurance staff members were gathered by using standover tactics. We all know of the case where one company placed on its staff notice board a notice warning people that their jobs might be lost if they did not sign the petition. Meetings were organised and staff was coerced into attending. At one meeting I attended the managers of 2 companies and the deputy manager of another company ticked off names of staff members on a roll as they entered the meeting to ensure that they could detect those who did not attend. Money was supplied to political parties, including Senator Webster’s Party which receives vast sums of money from a well known, foreign owned insurance company. Senator Webster is never ashamed of this. He does not mind to whom he has to pay back favours.
– I would rather have that than the Arabs’ money and -
- Senator Webster has just demonstrated his typical racist attitude. He is not concerned about money when it comes from white countries, but he is concerned when it comes from Arab countries. If only those in the community who are underprivileged, who are out of work even now, who cannot afford the luxury of insurance and to whom the tax deduction which props up Senator Webster’s insurance companies means nothing, could galvanise such financial and logistic support it would be all right. Would a meeting called by pensioners or their dependants or any other such group attract one-hundredth of the crowd that was dragooned to the meeting which Senator Webster addressed in Melbourne? In fact, would he attend such a meeting and address them, or would he do as he did in a debate recently in this place and call those on unemployment benefits bludgers lying on the beach. This is typical of his attitude to people.
– It was only Senator Georges about whom I said that.
– You said that about the people you saw on the beach when you were lying on the beach resting your injured back. You have done that several times in this place, and you know it.
– It is quite right. Many of them are too.
– You are typical of the people in the community who claim that those who are unfortunate are unfortunate through their own fault or their own misdeeds.
– I do not.
– You persistently do that.
-Order! It is highly disorderly to interject. Senator Webster, would you please remain silent while Senator Grimes is addressing the Chair?
– He was addressing me.
- Mr President, I rise to order. I believe that the speaker on the Government side has been unduly provocative. I suggest that he confine his remarks to the Bill before the Senate and cease reflecting on personalities on this side of the chamber.
– The Standing Orders provide that interjections are highly disorderly and I have asked that the Standing Orders be observed. I now ask Senator Grimes to connect his remarks to the Bill.
-Thank you, Mr President. I can understand Senator Jessop ‘s and Senator Webster’s sensitivity.
- Mr President, I believe that the honourable senator on the Government side is being unduly provocative.
-Order! Are you speaking to a point of order? If so, what is the point of order?
– I am suggesting, Mr President, that you quite properly admonished the Senate for the interjections, but immediately thereafter the honourable senator on the Government side chose to use my name and Senator Webster’s name in his opening remarks. I suggest that that was completely out of order and against your ruling.
– I did not hear that.
– Speaking to the point of order, Mr President, perhaps I should apologise to the Senate. Senator Grimes in fact was referring to a remark I made. I referred to Senator Webster as a national disaster and tried to connect the discussion to the Bill with that reference, because that is what the Bill deals with. Senator Jessop has totally misinterpreted what Senator Grimes said.
– I think that if Senator Grimes continues now the Senate will get along much better.
– I would liken the campaign against the establishment of an Australian Government Insurance Corporation to the campaign which was used in New South Wales in the late 1920s when the then Labor Government decided to introduce compulsory workers compensation legislation. The same insurance companies, Australian and overseas owned at the time, violently opposed the introduction of that measure. They described it as socialistic, communistic and against the civil rights of individuals. They even said that it was the work of Satan and therefore was un-Christian. They refused to underwrite workers compensation and the Premier of the day set up the State Government Insurance Office to cover the workers. Within 2 years the companies were back underwriting such insurance. There would be no company today and very few, if any, people in this chamber who would oppose compulsory workers compensation. It would seem that times change and views change but that the tactics of those who oppose this sort of legislation and any social reform never change.
The aim of the Australian Government Insurance Corporation is to consolidate those Government activities at present concerned with insurance into one office as much as possible. It is also to provide an alternative to the system of the agency sale of policies which encourages the pressuring of clients and limits the alternatives available to them. It also is aimed at providing insurance for non-commercial risks such as natural disasters and crop and stock losses. I believe all of these aims are justifiable. The time has come for all of these things to be carried out.
This party does not accept and has never accepted the philosophy that the private insurance companies, which it would seem to us are more concerned with investments and profits than they are with insurance policies and the quality of insurance for their clients, have by divine right the prerogative to engage in profit making insurance, that non profit making insurance should be the responsibility of government, and that if non profit making insurance is to be carried out by private companies it should be subsidised by government. Honourable senators opposite are only too happy many times to condemn any government enterprise which does not make a profit, but when they are confronted with the possibility of an instrumentality which would make a profit and, what is more, an instrumentality which would demonstrate the deficiencies of the private sector, they will either sell it, as they did in the case of Comalco, or they will oppose its establishment, as they are doing in this case.
This Government and previous governments in this country have had to act to protect policy holders from companies which indulge in dubious practices and companies which go broke leaving their clients without any cover. This Government and other governments have had to prop up the insurance industry with special tax provisions and with taxation deductions which have been made available to policy holders. Despite that we still have unfortunate people who are left without cover or have their compensation payments halted because the company, for all sorts of reasons, may default. We have had companies such as the Northumberland company masquerading as insurance companies but which in fact have been a front for a property speculator.
With the establishment of the Australian Government Insurance Corporation people will have the choice of obtaining insurance for their specific needs without having added the extra expense of agents’ costs and commissions and without the concern that the company might go broke and leave them without any cover. Most people still will prefer to deal with the private insurance companies, and these insurance companies will survive and thrive in Australia as they do in almost every comparable country which has a government office. The nearest to us is obviously New Zealand. In Sweden, Holland, Austria, Israel and many other countries which have got government insurance offices the large private companies survive and thrive. Even in this country if the AGIC wrote life insurance and got 1 per cent, 2 per cent or 3 per cent of the business, which the industry and the Government think is most unlikely, it would be a drop in the ocean. The Opposition knows that and the insurance companies know it.
If the insurance companies are as efficient as they say they are, if their benefits are as good as they say they are, and if their service is as good as they say it is, there is no possible chance of the AGIC taking more than a small proportion of their business. But I suspect that they suspect that they are not good as they think they are. They have not kept up with overseas practices and they have indulged in investment practices of dubious social value, such as spending 18 per cent of their investments in property speculation and only 6 per cent in housing. I suspect that that is what they are worried about. They are worried that a corporation such as the one proposed will expose their archaic practices and their lack of actuarial assessment of the risks, which Senator Button and Senator Everett have both demonstrated. I believe that they are concerned that their reliance on a false property boom to maintain their capital will be exposed.
The Opposition and the insurance companies claim that we have a blissful situation in this country, that everyone has readily available insurance cover for all his needs. However, we know that in the transport industry, in the long haulage industry particularly, and in many other industries which were partially listed by Senator Button people cannot get cover. We know that natural disaster insurance in this country is in a very poor state, and people of Darwin, Brisbane and other places who have suffered unfortunate disasters all can testify to that. In response the insurance companies- they responded in the same way with their alternative scheme to the national compensation scheme- say: ‘It is easy. All you have to do is let us cover it and you will pay fork’.
With the possible exception of the case of the Queensland Government Insurance Office, an office that exists in that dreadful socialist State run by Mr Bjelke-Petersen, reinsurance is one part of insurance that is almost entirely reliant on overseas capital and overseas companies. Up until 1973, when the new insurance legislation was introduced, 20 companies collapsed in 5 years leaving people without any insurance cover and having to pay extra premiums for new insurance. Those people who were insured by companies which defaulted, people from the flooded suburbs of Brisbane and other places, people who had their cover with companies which were fronts for dubious characters, will understand the old saying about insurance companies: ‘It is easy to give them money but almost impossible to get it from them ‘.
I believe and the Government believes that the Corporation will give the people a choice of cover in the field of insurance with less risk of being defrauded, without the necessity to pay for an army of agents on commission whose livelihood depends on selling policies which give them the most commission rather than selling policies which give the client the best cover. It is for these reasons that I reject and all honourable senators on this side of the chamber reject the sort of hysterical campaign that has been waged against this Bill. We reject the argument that the Opposition has carefully considered the whole legislation and decided that it is not a good thing, because we believe that the Opposition was opposed to the legislation before it even saw it. I support the Bill. I commend it to the Senate.
– It was interesting to hear the physic that Senator Grimes, who has just resumed his seat, prescribes in the deplorably chaotic state into which his Government has brought the country. He would know so much about the insurance industry and industry generally. As a medical practitioner supported by a government health fund, underwritten by that security, of course, he can prescribe the method by which the insurance industry is to be governed. It is so interesting that the Government’s proponents of this scheme should be Senator Everett, Senator Grimes and Senator Button who represented the Labor Party on the Senate Committee which recently considered the national compensation scheme. Of course, that had a great impact upon the insurance industry. One of the principal recommendations that the Committee brought to the attention of the Senate was that the Committee was satisfied that the Bill, if implemented, would have significant effects upon the private insurance industry, State government insurance offices, the state and the economy generally. It was the unanimous recommendation of the Committee that the National Compensation Bill should not be passed unless the Government indicated to Parliament how such problems were to be met.
Apparently there has dawned upon Senator Grimes since he has ascribed to that view a new fascination with some idea of party loyalty to rescue this Bill from the ashes. I ascribe his addiction to party loyalty. I do not descend to the blaggardly imputations of slush funds to which he referred and to which some fleeting reference was made by Senator Everett. Senator Everett did have the decency to abstain from blaggarding the insurance industry generally, although he was perhaps instinctively preoccupied with the idea of being obligated to vested interests.
With that brief preface, Mr President, let me remind the Senate that the Bill proposes the establishment of an insurance corporation, the capital of which would come from your and my money, got into the hands of the Government by means of taxes. The first advantage that the Government baby would be given is that it would not be required to pay any interest on that capital. Secondly, the Corporation’s management would be appointed by the Government. Thirdly, provision is made within the legislation for unlimited loans to be made available to the Corporation with the approval of the Treasurer at interest rates which the Treasurer prescribes. In other words, every advantage would be given to the Government Corporation so that it could compete with advantage against the private competitors from whom it draws its money by taxation.
At first the Corporation was not to be subject to the general insurance legislation enacted by this Parliament- the Life Insurance Act and the Insurance Acts. But Senator Wheeldon was persuaded to make the new Corporation nominally subject to these Acts. This new Corporation would be subject to the major provisions of those Acts but exempted in the two important respects of its authority to commence business and its liability to be wound up. The Corporation would be exempted under a special section of the legislation.
– Do you say that that means it is only nominally subject to the Acts? Is that all the Acts provide for?
-The idea that there is any verity in the Corporation’s being subject to those Acts is one of those pieces of fantastic nonsense with which Senator Wheeldon is most apt to display his dramatic powers in this Senate. A Commissioner of Insurance would be appointed by Senator Wheeldon, and there would be a manager of the Government Insurance Corporation. Both of them would be subject to the direction of Senator Wheeldon. So it is, as Arthur Calwell would have said years ago, a rather phantasmagorical suggestion that Senator Wheeldon ‘s Insurance Act should operate as a control over this proposal. That is the nature of the proposal, but what of the context? Dear, oh dear, Mr President! The grant of largesse that is offered to the Senate tonight is said to be Gough ‘s gift to the nation- another public enterprise. We do not need the Post Office to deliver our letters nowadays to know that to get a letter from one suburb to another will cost us 18c and a telegram will cost us 10c a word. Oh, is it not wonderful to have a government enterprise at the service of the people, in that instance rejoicing in a monopoly!
Take the case of the Australian National Line- the Tasmanians will be particularly interested in this matter, especially Senator Grimes and Senator Everett. It rejoiced the Tasmanian community a couple of weeks ago to have a 40 per cent increase in shipping freights. That public enterprise does not have a complete monopoly. As an instance of how modern democratic socialism is working, Mr Holyman wants a new ship to replace the William Holyman which operates between Melbourne and Launceston. The Wanaka is available at $2.5 m from New Zealand. Mr Holyman has asked for an import licence and it has been refused unless he goes through tenders which he went through a year ago for a vessel for which the tender then was for $ 12m. If he had to buy a vessel for $ 12m it would put the freights up 100 per cent. That is the way in which the Minister controlling the Australian National Line is squeezing the private enterprise out of business so that by creeping democratic socialism a monopoly is gained, not instantly but gradually.
– That man is a crack nel)man
-Mr President, I ask that the honourable senator be required to withdraw that remark. It is not a remark appropriate to the Senate to suggest that Mr Holyman is a crook.
– I shall produce the evidence on some occasion.
– I rise on the point of order also. I noticed that on several occasions when I interjected, Mr President, you took a firm stance to quieten me but for the last 10 minutes Senator Poyser, a person from your side of the House, has interrupted Senator Wright constantly, has made assertions that a man of high standing in the community is a crook, and you, Mr President, have taken no action. I fully endorse Senator Wright’s request.
– That is not a point of order. That is an impudence towards the Chair. I ask Senator Poyser to withdraw the imputation against the person.
– I will withdraw it until such time as I bring the evidence before this Senate to establish what I said tonight.
– The way that democratic socialism works under such a depraved government as the one from which we have heard a spokesman just this minute, is that it gives power to a public corporation to go into business. All those companies which are in business in the general and life insurance fields have been authorised and are under the supervision of the life insurance and the general insurance company legislation of this country. The Government uses its power to restrict competitors to the advantage of the Government enterprise.
Firstly, the Government offers the government enterprise favourable rates. Secondly, it fixes the premiums to be charged by that enterprise’s competitors so that it sterilises the competitors’ business and makes it unprofitable. Thirdly, the Government makes available to the government enterprise unlimited amounts of capital which private companies have to secure from people who invest their savings in those companies because they have confidence in them. The Government establishes its enterprise simply by a stroke of the pen, by incorporating a provision in the Appropriation Bill, which cannot be rejected unless one is prepared to reject the Government. That is the way in which this Corporation is proposed to enter the insurance field. It would gain advantages from the Government with the aid of the ample civil service, a member of which chooses to smirk in our gallery while an Opposition speech is being made. Then the officers of the Corporation, armed with fat salaries and advice- their advice not quite as impressive as their salaries- will make their inroads upon their private competitors. That is the way in which the State government insurance offices are working in the workers compensation field at the present time. The State government insurance offices are in a monopolistic situation in South Australia and some other States because the State governments have fixed premiums for private competitors, supplied capital to the State government insurance offices and thereby enabled them to take over the field of workers compensation.
Sad I was to hear my colleague from Tasmania, Senator Everett, say that the Opposition’s argument and apprehension in this respect are without foundation.
Look at the position of Trans-Australia Airlines which has existed for 25 years. Look at the position of the private banks. They have also carried on operations for 25 years. Saddened I was when my colleague, Senator Everett, did not remind himself that the original airways Act was in the form of a straight-out monopoly for airways. The High Court of Australia invalidated that Act and said that TAA could carry on in competition, that Australian National Airlines, as it then was, could not be expropriated because of section 92 of the Constitution. The only thing that saved the private trading banks from the depredations of Senator Everett’s predecessors was section 92 of the Constitution.
But of course in the Chifley lecture of recent days Mr Whitlam has gone on record as saying that the beacon of the Australian Labor Party is Chifleys’ idea of the light upon the hill, and now the Whitlam doctrine of equality and Whitlam delivering the sermon on the mount. His sermon is: Do not do things directly; do them deviously. If the Constitution balks you in attempting to obtain $4,000m from the Arab states, get it anyway and bank it in New York. Damn the Loan Council! The Government has decided to start up an insurance office and give it advantages. Mr Whitlam has said: ‘We will see that the competitors are under restriction. ‘ He thought he would have all competitors throttled before he went out of government. But he is not tarrying on the going; he is almost gone. He has shown his sting in the last 2 Budgets directed -
- Mr President, I rise to order. Allowing for the euphoric enthusiasm that we are accustomed to from Senator Wright, I suggest with respect that he has strayed very far from whatever he thinks he is discussing tonight. I suggest that he should be dragged reluctantly back to the issues that are before the Senate.
– I am finding a thread of continuity in the honourable senator’s speech, if he will continue along those lines.
– I have no responsibility for your understanding, Mr President. I am responsible only for my argument and I will persevere. Let me make it relevant -
– You may persevere and stick to the subject.
– Yes, let me make it quite relevant. I am saying that this Bill is the beginning of the erection of a public enterprise so that that public enterprise can be the recipient of Government advantages and so that its competitors can be subjected to restrictions. I am pointing out that Mr Whitlam in a recent philosophical discussion of the Labor Party made that very point. I enlighten the Senate for those who could overcome their prejudices with the aid of the lucubrations referred to this morning borrowed from the juvenile juveniles, not Juvenal’s satires. If that argument were to be understood it would be a dynamic argument recognised even by Senator James McClelland against this Bill.
I was about to say that the Whitlam Government had shown that this was not merely philosophising. It has practised this principle and showed its teeth in the vicious assault that it made on the insurance companies in the Budget of 1 973. At that time in 3 important respects of taxation the Government punished the life insurance companies. What for? It was only to reduce them to the ordinary state of income tax of other companies. Then, with regard to their special calculated liabilities and special formula that had existed for years, the Government reduced the deduction that was available, in one year from 3 per cent to 2 per cent, and in the next year from 2 per cent to I per cent. Yet the Government is preaching the pretence in this Budget that it wants to preserve private enterprise. Really, it wants to preserve its own rabble in office and not private enterprise. The Government did not go the whole hog and reduce the taxation deduction to nothing.
That brings me to the point I wish to make in regard to the pretence of introducing this Bill and debating it tonight. It is designed to destroy private enterprise insurance. Yet last night the Government introduced a Budget in which it pretended to give protection to private industry. Honourable senators will find it recorded in the Budget Papers that last year wages increased by 28 per cent. The income of trading companies last year was down 30 per cent and the decreasing farm production was down 43 per cent. I am citing figures from the Government’s own printed Budget documents. The pretence was that the Government was out to protect private enterprise. But tonight we have this socialist vendetta against the insurance industry in the manner in which I have indicated, directed to the purpose of destroying that part of private enterprise occupied by the industry field. How important it is that it should not be destroyed. It commands assets of $ 10,000m, all of it contributed through confidence out of the savings of people who earned their money, not from taxes gathered by this Government. As far as the life insurance companies are concerned, the funds are owned by the great life insurance companies of this country, those companies which pioneered 125 years ago, before these socialists were ever dreamed of, the principle of mutual non-forteitable life insurance policies. That is the sort of institution that this Bill is determined to subvert and destroy. We had the pretence last night of the Government protecting private industry and this night subverting it.
This pretence can be shown by citing figures in relation to personal income tax. Three years ago personal income tax amounted to $3,000m. Last year it amounted to $6,000m. This year, it will be increased to $8,600m. Did anybody get the impression of that fact from the Budget Papers which were presented last night? If honourable senators read Budget Paper No. 12, they will see those figures cited there in the statistics. It is acknowledged that personal income tax is expected to rise this year by $2,600m. This is stated against the pretence that the Government was effectuating a reduction in personal income tax. This Bill represents a pretence of the same order.
I do not deny that there are too many general insurance companies at present. But there are not too few so as to require added competition from these creatures from the Government benches. But if there are too many, that is the fault of the Life Insurance Commissioner who has given authority for them to commence operations. I do not deny that there is too much foreign growth in the general insurance field, but that is because of a lack of supervision. But what of the argument, this brilliant and ingenious argument from Senator Everett, as to foreign elements in the insurance field? In one breath he says that we are only creating another competitor, but when he deprecates too many foreign insurance companies he implies we will make the Corporation the excoriator whereby foreign companies will be mown down and pushed out. The whole proposal is an unvarnished, doctrinal idea emphasised by the Labor Party at Terrigal where, as my colleague Senator Carrick so cogently pointed out, Labor Party members expressly wrote into their platform that they were out to socialise insurance so as to get their hands upon the $ 10,000m of the industry’s savings. Perhaps that gave them the idea to go to Khemlani for $4,000m from the Arabs.
One aspect of this Bill deserves further consideration. It is a piece of hypocrisy for the Government to put forward as a mainstay of the Bill that the Corporation might be directed by the Minister to engage in natural disaster insurance even though it was not on commercially sound principles. It is specifically provided in clauses 13 and 14- in language that is very interesting- that after an investigation or without an investigation the regulations may be clear that is in the national interest that the Corporation enter into any class of insurance or any class of contract even though it is not upon sound commercial principles. It should be acknowledged by this Government that in October 1974, 2 months before the Darwin disaster, the insurance industry as a whole put before the Government a proposal for a national compensation scheme for national disasters, but the Government did not even consider it. It wanted to nationalise the industry. So we will persevere when we go into government with the industry’s idea, and I have no doubt that there will be a better natural disaster scheme, based upon proposals nationwide from the industry co-operating together, than anything we could get from a public enterprise with a performance such as that of the Australian Post Office or the Australian National Line.
The Opposition realises that it has an opportunity and the inescapable duty for the second time this day to reject detrimental legislation.
– I rise to a point of order. I have every confidence in the time keepers and the officials of this Parliament, but I have a feeling that the honourable senator has been talking for two or three days. Can you let me know, Mr President, how much longer the honourable senator has to make his speech?
– That is a request that any honourable senator can make. Senator Wright commenced his speech at 8.37 and he will conclude at 9.7. He has some time still to go.
– That is an impudent and inappropriate suggestion. For you to condone that, Mr President, almost makes me willing to forfeit my remaining 2 minutes because that rubbishy, rotten insinuation from a petty Minister of spleen and prejudice from Sydney is completely provocative. I. just want to say that we have an opportunity for the second time today to reject odious and detrimental Bills, and this is one of them. Any government of courage would go to the country and test the legislation. The Government has a dozen such opportunities to take us to a double dissolution tomorrow. Let the Government stop bleating about delaying measures. We are defeating measures that are out to destroy purposeful industries in the country. We will go to the country as soon as the Government drops the handkerchief; but it is overcome with a craven cowardice because it would be defeated.
– I am not a craven coward in raising some of the matters I shall in this debate. I find it hard to correlate the remarks of the previous speaker with any debate on the Australian Government Insurance Corporation Bill and I will at least endeavour to keep my remarks to that legislation. My colleagues Senator Everett, Senator Button and Senator Grimes have adequately covered the general aspects of the Bill, but there are specific points which I feel it necessary to make. One that I will come to a little later is the matter of discrimination. While I have spoken on this subject a number of times I feel constrained to do so this evening in this debate because I am the only women who will be speaking on this Bill.
While I am sure that everyone in Australia is aware to some extent of the intensive campaign that has been waged by the insurance companies against the Government’s entering this field not everyone would be aware of the amount of money that is being spent on that campaign. In actual fact the only people who do know, the insurance companies themselves, are pretty determined to make sure that not too many people ever find out the true figure. Perhaps it is sufficient for me to say that a great deal of money has been spent and none of it, I am sure, with the express permission of the people to whom it rightly belongs, the people who are entitled to a say in the matter- the policy holders themselves. It is their money that is being spent. It is their money in terms of bonuses or reduced premiums for their policies. This money, this finance which rightfully belongs to them, has been used by the insurance companies to finance the most vigorous campaign against the interests of those very policy holders.
It is not so very long ago that I recall the State manager of perhaps the largest Australian insurance company telling me that the shareholders of his company were his policy holders. I do not think his company asked his policy holders or his shareholders whether they objected to their money being spent in such an intensive advertising campaign. I am quite sure that if it had taken the trouble the majority of the policy holders would have said it is just not on. I am quite sure that the majority of policy holders will, if not now at least by the time this debate finishes tonight, welcome the entry of the Australian Government into the insurance field. As the existing insurance companies have this type of money available and particularly if they have it available at such short notice perhaps that is an even better reason for the Australian Government to get into this field. I believe that if the money is available it should be available to the policy holders. It belongs rightfully to those policy holders. I am a little concerned that there have not been demonstrations even larger than those called by the insurance companies from irate and angry investors.
If I had an insurance policy with a company that participated in the campaign I would certainly object. I would object to the extent that I would be cancelling my policy. But I am not without hope that these objections may still be made. I am not without hope that people who have allowed their money to be misspent and misused in this way may still, even at this late date, register their protests or perhaps we can hope that it will be these people who are the first in line to take out policies with the Australian Government Insurance Corporation. I believe that most people regard insurance as a means of building security around themselves and their families. Yet I question just how many of those people even read their insurance policies and how many of them sign to pay insurance premiums without actually knowing the contents of the insurance policies. In particular I question whether women, who make up more than 50 per cent of the total population of this country, are aware of some of the discriminatory clauses in most of those policies.
I refer specifically to a letter received by a policyholder from an insurance company after she had queried an amended endorsement to her personal accident and sickness policy. I point out that this letter is dated July 1974, but I doubt that there has been a drastic change in the attitude of the insurance company concerned. The letter states-.
The consensus of opinion - it does not state whose opinion was asked for- was that all disablements arising from menstruation should be excluded from this Policy. However, it was felt that this would be a too severe restriction on the Policy at this time and that the exclusion should relate specifically to the complaint in question. This disability exclusion is not to be construed as being selective on the basis of ‘female disorders’ but this complaint stands in the same situation as, say, a heart attack, i.e., having suffered once a person almost invariably will suffer further attacks.
I have heard a lot of rubbish in my time and I am likely to hear a great deal more, but to refer to a perfectly normal bodily function in the same context as a heart attack must be one of the most ludicrous things that I am ever likely to hear. Young women can and do mature- physically at least- as early as 1 1 or 12 years of age, and that is a perfectly normal occurrence . I do not know of any woman who has not matured in that sense by the age of 16. Possibly there are some, but there would not be many. For an insurance company, or anyone else for that matter, to deny women their rights because of that normal maturation process is nothing short of criminal. Yet it appears to be the norm, or at least is accepted as such. No one appears to have complained about it, except a handful of women who are concerned.
A document from another insurance companyunfortunately, this document does not have a date on it- under the heading of Endorsements’ states: lt is a condition of this policy that no claim shall be admitted in respect of a disability resulting from pregnancy or childbirth or any consequence thereof.
Now we have an insurance company putting childbirth and pregnancy in the same category as exotic diseases. I have already said that more than 50 per cent of the entire population of this nation are women. There are bound to be some who have or could develop some disability resulting from pregnancy or childbirth, or even both; but all women are not in that category. Yet all women are penalised by the restrictive clauses in insurance policies. There is possibly a fair proportion of the male population who have or could develop some disability relating to the prostrate gland, but the insurance company does not consider that worthy of the endorsements or discriminatory clauses that apply to female disorders.
I shall refer to one more example of the discriminatory practices currently being exercised by the insurance companies, and there are something like 300 of them. This document is up to date, being dated 1975. It does not have on it a month or a day, but I suppose that does not mean much for insurance companies. It is a personal accident and illness insurance policy and, among other exclusion clauses, it states:
The company shall not be liable in respect of death or disablement . . . in the case of a female, caused wholly or in part through childbirth, abortion or pregnancy (even though accelerated or induced by accident).
I repeat: That clause is included in a personal accident and illness insurance policy dated this year, this enlightened year, this International Women’s Year, 1975. So if a person happens to be disabled as a result of an accident and the person happens to be pregnant- and one has to be a woman to be that- the company could and possibly would refuse payment on that sole ground, namely, the fact that she is pregnant.
Let us look at another aspect of insurance and discrimination as far as women are concerned. Let us look at the executive type of insurance cover. Let us look at what happens to a woman executive, who could be the managing director of her own company. She may want to have the same type of insurance coverage as she provides for the male executives she employs. One woman of whom I know was advised that the insurance company she had chosen to give her a quote would provide her with a maximum of 2 years coverage, subject to a 50 per cent loading. After all, we women are the weaker sex. Her premium would be 50 per cent higher purely and simply because she is a woman. I should like to explain a little more the sickness and accident policy formula. As I am given to understand, apparently the accident component varies depending on the type of work one does. For instance, a white collar worker- male, of course- probably would be on the lowest scale of risk, while a labourer probably would be nearer the highest scale, depending on the type of labouring job that he was doing. Generally, the sickness component is considerably higher as far as premiums are concerned, and one can obtain insurance cover for a pre-determined amount of money to be paid each week in the event of either sickness of accident. So what those discriminatory clauses mean is that a woman pays 50 per cent more than her male counterpart for each $10 a week coverage for the sickness component, even if they are doing the same job. They could both be white collar workers. In fact, she could establish that she had not had a day’s sickness in the previous 12 months, 2 years or 5 years; but she is still subjected to a 50 per cent premium surcharge.
The policies of the Australian Government Insurance Corporation will not carry such discriminatory conditions. The Prime Minister (Mr Whitlam) has said, in addition to referring to employment opportunities for women, that the
Government will encourage the AGIC to extend to women the same opportunity to take out policies as men now enjoy. Let us look at what happens if you decide that you want to earn your living on a parttime or commission basis, or even on a professional basis. Many women do work in that way. If you are a professional who is paid a fee for service, if you are a musician, an artist or a singer or if you work in the area of advertising- if you work not for a full 12 months but on a fee for service basis- and on top of all those things or any of them you have the audacity to be a woman, at the moment you need not expect to be able to get coverage from an insurance company because the policies specifically state that women are excluded if they work on a commission, fee for service or part time basis. I wonder just how many women who earn their living as doctors and are paid a fee for service are aware of those discriminatory clauses. I wonder how many of the male doctors sitting on the Opposition benches are concerned at the discrimination against their female counterparts. Would they consider, even though their counterparts are female, that they are still second rate citizens and not entitled to equality?
There are many thousands of people- possibly there are close to hundreds of thousands- who earn a substantial living from such things as writing freelance articles for local or overseas magazines. There are hundreds who sing in the clubs, the hotels and the discotheques. There are hundreds who participate in radio, television and stage productions. Yet it is only the women who are excluded from insurance cover if they work on a part time basis. Many women work on a door-to-door commission sales basis. Women who operate the party plan system throughout our communities are paid either a fee or on a commission basis. They are not entitled to insurance coverage. A male who works on a door-to-door sales commission basis can obtain insurance coverage, but the women are not entitled to it. I find this an incredible situation. I find it even more astounding when considering the figure with which I have already provided the Senate which shows that more than 50 per cent of the entire population are female.
– That is the problem.
– Perhaps that is our problem; perhaps our problem is that we live longer. I am rather shocked and disturbed to find that many women do not even appear to be aware of the discriminatory clauses. I am shocked and disturbed that the men who work with those women, who live with those women and who rear those women, have not done much about the situation.
Let us examine the formal discrimination that is normally shown to women when, among other things, they want to take out insurance policies. One of the first questions a woman is asked when she applies to take out an insurance policy is her maiden name. What the heck has that to do with any insurance coverage? What possible relationship could it have to the cover that the insurance company will give her, if it agrees to give her any coverage at all? Probably the next thing the insurance company will want to know is her husband’s name- which is quite legitimate, I suppose- his occupation and the name and address of his employer. What has that to do with her insurance coverage? What difference does it make whether Fred Bloggs works as a drainage contractor or as an architect if his wife wishes to take out insurance? I have not yet seen one standard form from an insurance company offering a woman any form of insurance that does not require this information.
Let us look at the woman who lives in a mixed household, which is quite acceptable in these days of changing life styles, where there are a number of females and a number of males. They do not necessarily have to be married but each of them may contribute in some way to the furnishings of that household. Such a woman may want to insure her portion of those household goods. She may not even be able to take out insurance coverage for those goods- it depends entirely on the insurance company- but a male in the household will be able to take out insurance. It does not matter whether he is unemployed; he will in all probability be able to take out insurance. Even if the woman has a profession and is earning about $10,000 to $15,000 a year she may be refused insurance cover for her household possessions.
Because we are discussing insurance in such an important way tonight we cannot afford to overlook the discriminatory practices which were perpetrated against migrants who came to Australia from specific areas. I am aware that most insurance companies claim that they have excluded the more blatantly discriminatory sections in their existing policies, but I am also conscious that a great number of then would be able to find ways and means to continue the discrimination against those same migrants. Until last year most policies carried specific clauses stating that migrants born in countries on the shores of the Mediterranean, with the exception of France, were not eligible for insurance coverage. It did not matter at what age they came to Australia; they just were not eligible for insurance coverage.
Most of the 300 odd insurance companies say that they evaluate such people now on a case by case risk measure. I have no doubt that a lot of people who were born on the shores of the Mediterranean and who have come to Australia are still being denied coverage even though the insurance companies are unlikely to give that as a reason. I have little doubt similarly that if such a person were a professional of any standing in the community he would qualify for coverage. But if his countryman were a labourer and applied he could be denied that right. The Australian Government Insurance Corporation will not engage in any discriminatory practices. Both the Minister for Repatriation and Compensation (Senator Wheeldon) and the Prime Minister have made that statement. It will not discriminate in its area of coverage or in its area of employment opportunity.
As I understand it, approximately 80,000 insurance staff are employed throughout Australia. Very few women have ever been able to become more than an officer, which is slightly higher than a clerk, but is possibly considered to be a reasonably high appointment for a woman in the industry. I think approximately three or four women have actually been able to become actuaries and are still operating in that capacity. I do not know of any who have become chief actuaries. That is not entirely the fault of the insurance companies but it has a great deal to do with the system of education which will now change quite naturally over the next few years.
I hope that more women will have the opportunity to be in on the decision making side of insurance. I hope that as a direct result of the Australian Government Insurance Corporation’s entering the field it occurs more rapidly than it would under normal circumstances. We heard earlier Senator Wright’s satirical eulogy on the AGIC as another public enterprise. Even though we did not hear a great deal about the Bill we heard a great deal about his feelings on public enterprises. I believe that the consumers of insurance throughout Australia welcome the entry of the Australian Government into this field. I commend the Bill to the Senate.
– I was very interested to hear the speech of Senator Coleman, who has just resumed her seat. She would seem to me to be somewhat of a latter day Germain Greer because she has been expounding the cause of women.
– Because she supports equality?
– I support the view that there are some areas in which women are discriminated against and I believe that those matters ought to be corrected.
– Is your wife covered?
– Thank heavens I married my wife because she believes in being a wife and regards her husband very highly. We have a very good partnership and I have looked after my wife very well as far as insurance is concerned. I have looked after my wife as any husband ought to look after his wife. There is nothing to be ashamed of in being a woman. I have a high regard for women. I believe that women have a very important role to play in Australia. Obviously honourable senators on the other side do not regard women as I regard them.
I was interested in the comments of the lady senator who has just resumed her seat. She might prefer to be referred to by some other term. I am not quite sure what the senatorial term for Ms is. She spent a lot of time in complaining, as other government senators have complained, about the money spent on the campaign by insurance companies in defending their position with respect to this Bill. I believe very strongly that the 8 million policy holders, many of whom would be women, would be very anxious to preserve the capacity of those insurance companies to invest their money in order to provide policy holders with the bonuses to which they are entitled. Honourable senators on the government side do not worry too much about spending money with reckless abandon on the propaganda machine of the government when they want to advertise Medibank, legal aid or the Australian Government Insurance Corporation. They do not worry about squandering the taxpayers’ money in that respect, but they have the infernal impudence to suggest that the private insurance companies should not spend some money to protect the interests of the 8 million shareholders in their companies, who would be the average working people in Australia- the people whom Government senators purport to represent. I believe that those people have been let down very badly tonight by the speakers from the Government side. This Bill is completely unacceptable to me.
– That does not make it wrong.
– It is unacceptable not only to me but to all members on the Opposition side because it presents a threat to the policy holders of the insurance companies in this country. The insurance industry in Australia employs about 50 000 people. Not only does it employ 50 000 people, it also provides an economic service to other private industries throughout Australia. I believe that the editorial in the Age of 15 May sums up my feelings and describes the attitude of the Government fairly well. Part of that editorial states:
The plan for the AGIC seems to be based more on Labor ideological prejudices and unbounded ambitions than on any clear cut national necessity. Even if AGIC should not be condemned for being as potentially dangerous as its vehement opponents fear or pretend; even if it would compete without unfair advantage over private enterprise or undue risk to taxpayers; even if it were to perform a useful social function, there is still a strong case against establishing it now. At a time when business confidence is at a low ebb, when fears of greater unemployment are already rife and when serious inflation is aggravated by excessive Government spending, to embark on yet another Government enterprise, to commit yet more public funds and nurture yet another nest of bureaucracy, is political and economic madness.
That really sums up my feelings and the Opposition’s feelings on this Bill, but it is in keeping with the Labor Party policy which was read out, I thought very properly, by my colleague Senator Carrick earlier in this debate. He referred to the ideological prejudices of the Labor Party. This Bill is quite in keeping with the philosophy of the ALP which seeks to exert socialistic control over finance, distribution and exchange. The Labor Party greedily looks upon the insurance industry, particularly the life assurance section, as a juicy plum ready to be eaten by it. That seems to be typical of the attitude of the Government of today. The life assurance industry provides long term security for millions of Australians. As I said previously, 8 million policy holders have a direct interest in these companies. These policy holders or shareholders have a vital interest in the development of Australia.
– That is only in the mutual offices. They are not shareholders in all the offices.
– I was referring to the mutual offices.
– There are not 8 million mutual insurance office policy holders.
– They were partners in the development of Australia until this Government came to power.
The ACTING DEPUTY PRESIDENT (Senator Devitt)- Senator Jessop, I think that if you were to pursue your speech we might find clarification of the point that Senator Wheeldon is trying to raise, but 1 hope that the opportunity will be given to Senator Jessop to be heard in reasonable silence.
-Mr Acting Deputy President, I respect your judgment. I suggest that I am making the speech.
The ACTING DEPUTY PRESIDENT- That is the point which I am acknowledging.
– 1 was about to say that the policy holders in these mutual companies are shareholders in the development of Australia. I believe that that is a fact. Until this Government came to office that was the fact. Now the development of Australia has slowed to a crawl. I believe it is almost stagnant at this stage. The investments of the insurance industry represent 10 per cent of the total capital formation in the private sector. The industry, including the superannuation funds, has assets of $ 1 5 billion which seems to me to be quite a substantial investment in Australia. It represents more than 20 per cent of Australian private institutions.
Many petitions objecting to the establishment of the AGIC have been presented in the Senate. They were signed by hundreds of thousands of electors who object to the introduction of this Corporation. I notice that there was some miserable attempt by the Government to conduct a campaign to counteract this. Petitions were presented from 13 people here and 10 people there to support the Corporation. Public opinion polls have been carried out.
– They have gone from 8 per cent to 43 per cent in favour of the Corporation.
– It seems to me that the evidence is, as the Minister acknowledges, that a substantial number of Australian citizens- a majority- are against the proposal. I took part in a march in South Australia.
– I saw you.
-I am glad to know that the Minister was at least sufficiently interested to watch the television on that occasion and notice that I took part in that performance.
– You were describing yourself as a life underwriter.
– He has been calling me the underwriter ever since. I am not ashamed to be associated with people in this industry. They have done so much for Australia. The Minister tends to deride these things. I do not lie down in the street, as the former Treasurer did the other day in an attempt to regain his popularity among the people of Australia.
The ACTING DEPUTY PRESIDENT- I think you should direct your comments to the Bill, if you do not mind.
– I was describing my involvement in what I believe to be a genuine -
The ACTING DEPUTY PRESIDENT- I had hoped that your remarks had some relationship to the Bill and that you would tie up those comments to the terms of the Bill. If not, desist from that line and return to the Bill, if you do not mind.
– I agree very happily with your suggestion, Mr Acting President. I was describing my happy involvement with a peaceful demonstration.
The ACTING DEPUTY PRESIDENT- I think we have dealt with that point. I ask you now to return to the Bill, if you do not mind. I would appreciate it if honourable senators ceased interjecting so that Senator Jessop may be heard in silence.
-With due respect, Mr Acting Deputy President, I think I am devoting my attention to the Bill. This demonstration had something to do with the Bill. I was supporting the 12 000 people who were demonstrating against the actions proposed by the Government. It was very difficult for the Labor Party to attract a speaker on that occasion. In fact, several people refused to attend that demonstration. But I must pay some tribute to the honourable member for Hawker (Mr Jacobi) who was prepared to front up and try as best he could to excuse the Government or to defend the Government for its action in wanting to introduce this statutory authority which threatens the employment of 50 000 insurance workers throughout Australia.
– They have had the same trouble today in getting speakers.
– I am sure that that is quite true as well. I shall indicate to the Senate one or two aspects that I believe have been ignored by the Government. The Minister confidently suggests that he can set up the Australian Government Insurance Corporation at a cost of about Sim. He suggests that that is all that is required to introduce this bureaucratic government instrumentality. I suggest that his estimate would be sadly amiss and that the cost of establishing such an organisation would be far greater than he suggests. The cost of the necessary systems and computers alone would exceed the figure which the Minister has suggested. I suggest that a minimum staff of fifty would be required to introduce and establish this Corporation. The cost of that staff in one year would exceed the authorised capital that the Minister suggests is required. The Life Insurance Commissioner has estimated that if the AGIC were to obtain only one per cent of new ordinary sums assured it would require a fund of $ 18m to administer that business. Further, no proper feasibility study has been carried out which would enable the true cost and probable benefits of such a corporation to be assessed.
I was interested in the attitude that was adopted by the trade unions that are associated with the insurance industry. As the Minister knows, or as he should know, they have changed their attitude to this measure. I should like to quote some decisions that were taken at various meetings which have been held in recent times. The following decision was taken at one meeting:
That Federal Executive, having given consideration to the following factors:
Decisions taken at meetings of members in all States on the matter of AGIC.
Decisions taken by Branch Committees of Management in relation to AGIC.
The failure of the Australian Government to take positive steps to convene a public inquiry on certain aspects of the operations of the proposed AGIC as requested in the Federal Executive resolution (No. 83/ 75) of 14 April 1975. decides that the Federation shall adopt a position of opposition to the formation of the proposed Australian Government Insurance Corporation.
Federal Executive further notes that the legislation to establish an AGIC has already passed the House of Representatives and resolves to take all possible steps to ensure that, if an AGIC is formed, the interests and employment prospects of AISF members are fully protected.
In addition, Federal Executive calls on the Australian Government and the insurance industry to urgently examine ways of protecting the Australian people against loss arising from catastrophe and natural disaster.
That is just a summation of the views of the trade union movement on this Bill. It indicates quite positively to me that the trade union movement is opposed to the Bill.
– Do you generally follow the trade union movement?
– I do. As a matter of fact, earlier in my career I was a member of the trade union movement. I know something of the machinations of the trade union movement. The Government has placed great store on the question of natural disasters, and I must say that that question gives me some concern, too. I share the view of the Deputy Lender of the Opposition (Mr Lynch) who said that we will support responsible measures taken by the Government alone or by the Government and the industry in co-operation to provide insurance cover for losses which are not now recoverable by commercial insurance. In every real sense, the
Queensland flood and the Darwin cyclone disasters have highlighted the deficiency which now exists.
I acknowledge, as does the Opposition, that there is a national need for government involvement, but the legislation before the Senate goes far beyond the boundaries of national need. In fact, it uses in a quite cynical way the concept of national need as a lever to justify government participation in all forms of commercial insurance, general insurance, life insurance, superannuation and reinsurance. The Minister must be aware of the contribution that has been made by the insurance industry with respect to natural disasters in the past. For example, for the Adelaide earthquake in 1954, $10m was paid out by insurance companies in South Australia. For the Hobart bushfire tragedy in 1967, $15m was paid out by the private insurance companies. The private insurance companies paid out $3m for the earthquake in Western Australia in 1968, $5m for the Victorian bushfires in 1969, $25m for the Townsville cyclone in 1971 and $90m for the Brisbane floods in 1973. They have already paid out $220m for the cyclone in Darwin in 1 974, and it is suggested- the Minister will know this as well as I do- that probably the eventual cost will be $230m.
– But not a nail has been driven there yet, and the wet season is coming.
– The honourable senator is quite right. This question involves the Darwin Reconstruction Authority that has been established. It has been inert, inactive and demonstrably inefficient, in my opinion, with respect to the rehabilitation of Darwin.
– Are you suggesting that the payment of compensation has been inefficient?
– I am not suggesting anything; I am just stating the facts. We have heard a lot about reinsurance, foreign investment and that sort of thing. But the facts surrounding the Darwin cyclone are that approximately 85 per cent of the $230m that will be paid out by the private insurance companies will be recouped from reinsurance companies overseas. I think that is a commendable thing and it shows the business-like approach of private insurance companies in Australia that they are able to attract no less than 85 per cent of foreign capital to deal with the disastrous situation in Darwin and only 1 5 per cent of the money has to be found from within Australia. I know in his heart the Minister agrees with me, that this is good business to attract money from overseas to pay our own natural disasters.
I suggest that the Government ought to look at the proposition that has been put forward by the private insurance companies in Australia. They are prepared to co-operate with the Government in this respect and to enter into what would amount to a partnership with the Government to overcome this problem. I cannot see anything wrong with the proposals that they have put forward. Senator Cotton referred to this earlier in the debate, and I endorse what he said. I condemn the Minister for Repatriation and Compensation and the Government for not paying sufficient regard to the suggestions put forward by the insurance companies. I respect the delicate position that the Minister occupies at the present time. I know him personally and I believe that in his heart of hearts he has some compassion and some concern for the economy of Australia. I wonder what pressures have been brought to bear upon him to refuse to go to the insurance companies and say: ‘How can we get out of this mess? How can you help us?’
– Ha, ha!
– I see that what I say excites the Minister’s interest to a hysterical degree. I hope that he will pay regard to the fact that we are going to reject this Bill. I feel sorry for him; he has an ideology with which I do not agree. 1 suggest that after we throw this Bill out he ought to go to the insurance companies and work out some proper, respectable and economic way of dealing with national disasters. I would support such moves. I wish him luck if he cares to follow my advice in that regard. I totally support the Opposition in rejecting this Bill.
– When Senator Cotton stood to open the debate on this Bill for the Opposition early this afternoon, he put forward the defence of the Opposition in the Senate for deferring this legislation since the beginning of June. Senator Cotton said that it was quite reasonable that the Opposition should ask for that 1 1-week period- I think it has been 1 1 weeks- in which to consider this legislation properly and to receive the views of various people with an interest in the insurance industry either as suppliers or as consumers. It seems to be a quite reasonable proposition that the Opposition should have taken time to review the Bill, to think seriously about it and to study it properly. The problem, however, seems to be that the Opposition has not made very effective use of that 1 1-week period it has had in which to ruminate upon the legislation.
That became apparent, I regret to say, during Senator Cotton’s speech when he claimed that the Australian Government Insurance Corporation would be exempt from fire brigade levies. I understand that that statement is in conflict with recognised legal opinion about the Bill. It became totally apparent when Senator Sheil stood to speak. Quite clearly, he had not read the Bill. He told us that the Australian Government Insurance Corporation would be exempt from the Life Insurance Act and the Insurance Act. Of course, if he had cared to look at clauses 15 and 16 of the Bill he would have seen that those 2 Acts quite explicitly will apply to the Corporation.
– With some exceptions.
– Yes, an auditing procedure since it will be covered by the Government Auditor. As for the fire brigade levy and all other levies which may be imposed by States or local government authorities, they are covered in clause 46(1) and (2) of the Bill. Although it seemed to be a reasonable proposition, an eminently reasonable proposition, that members of the Opposition should have time to study the Bill, obviously at least most of those who have spoken about it have not done so.
The second weakness in Senator Cotton’s proposition was that he postulated that the Senate would make its decision on this Bill. He said that the members of the Opposition in the Senate would decide whether this Bill would be passed or not. At the risk of provoking a confrontation in the Liberal Party, I refer Senator Cotton to a letter that was published in the Australian on 17 July 1974 and written by the Leader of the Opposition in the Senate, Senator Withers. In it Senator Withers stated quite unequivocally that it was the responsibility of Liberal senators in this Parliament to vote in accordance with decisions taken by the entire Parliamentary Liberal Party. It is a farce to suggest that this is a decision made in isolation or independently by the Opposition members in the Senate. It is a decision which has been made by the entire Liberal Party. Members of that Party are reluctant to acknowledge that because it shows the complete farce of their assertion that this Senate is a States House and an independent House. Of course it is a party House and it is regarded as such on both sides of the Parliament. It is just that the rules are spelt out a little more explicitly in my Party.
Obviously the Leader of the Opposition (Mr Malcolm Fraser) did not utilise his 11 -week study period very effectively either. As was remarked yesterday, he appeared before a gathering of insurance company lackeys on the steps of Parliament House or in Parkes Place on Monday and informed that gathering, that highly misled gathering, that the Corporation would be exempt from the Life Insurance Act and the Insurance Act. So, even after this 1 1-week study period, there appears to be an astounding amount of ignorance on the Opposition side about the provisions of this Bill
Not since the late 1 940s when I first began to take some interest in politics can I remember a piece of legislation which has been so grossly misrepresented as this Bill has been. Not since the Banking Bill of 1947 have so many lies been peddled by people in responsible positions inside and outside the Parliament as have been peddled about this piece of legislation.
The self-perpetuating oligarchs who control the life offices in particular see their private empires being threatened, with little justification. They seem to have a paranoid reaction to this legislation. The self-perpetuating oligarchs in the life offices are regarded by the naive members of the Opposition sitting across the corridor as benevolent servants of the public who hold their positions only because they have the approval and the goodwill of the millions of little people who hold policies. It is incredible that this sort of nonsense should be put forward in the national Parliament, indicating that the insurance companies, the life offices or the mutual life offices really operate in this way. It is accepted by the Opposition without doubts or reservations that the selfperpetuating oligarchs who control the mutual life offices are public benefactors. It is said that, if an insurance corporation were responsible to the elected government of the country, for some reason that has not been explained, it would develop into some sort of juggernaut which would erode civil liberties and ride roughshod over the interests and desires of the people. There is some danger, of course, that any large bureaucracy will develop a reason for existence of its own, quite independently of the ostensible reasons for its existence; but at least if we have a government-controlled bureaucracy or a governmentcontrolled corporation the people really elect the government. The policy holders of the mutual life offices do not elect the people who sit on those boards; those people elect each other and choose their own successors.
While I am speaking of governments and elections I should say something which I do not think has been mentioned yet. Senator Wright may be interested in this since he seems to have some respect for the decisions that the people make at elections, or decisions that he anticipates that the people will make shortly. It was spelt out quite explicitly in the policy speech delivered in April 1974 by the Prime Minister (Mr Whitlam) that the Government would establish this Corporation. I think that appears on page 23 of the published version of that speech, but I do not have it with me at the moment. The Government was quite explicit. There has been nothing underhand about this legislation. The proposal was spelt out very clearly before the election in May 1974 at which, I remind Senator Wright, the people re-elected the present Government.
– What a mistake.
-That is Senator Wright’s opinion. I have heard that some of the dinosaurs who sit in the Legislative Council of South Australia as representatives of Senator Wright’s Party say that they know the permanent will of the people. They have some divine or psychic insight which enables them to determine the permanent will of the people. The permanent will of the people presumably is that the Labor Party should never govern in South Australia or anywhere else. I did not think that Senator Wright’s views were quite so antediluvian as the views of his colleagues who sit in the Legislative Council in South Australia. This conscious misrepresentation of the facts concerning this Bill tends to have poisoned all discussion or all accurate reporting of discussion concerning the insurance industry.
I cite a report which was published in the West Australian on 12 July last of a meeting addressed by Mr R. S. Nords, acting State Manager of National Mutual Life Association of Australasia Ltd who, I understand, was one of the major organisers behind that spontaneous campaign of protest which the general public and insurance company staffs have been conducting for the last couple of months. In this spontaneous campaign of protest I recall that in one day in this Parliament I received 20-odd letters all with identical enclosures, all apparently typed on the same typewriter, posted in 2 post boxes and bearing identical postage stamps. Apparently I was supposed to be gullible enough to believe that these 20-odd identical letters of protest typed on the same machine in, I think, the office of the National Mutual Life Association, Mr Norris’s company, were part of a spontaneous display of opposition by private but deeply concerned citizens.
Returning to Mr Nords, he was speaking on a subject that is very near and dear to the heart of the life assurance industry- the special taxation perks which it has received over a number of years from a very generous government. They were explicitly designed to direct far more money into the life offices under the control of the self-perpetuating oligarchs who run them than would have occurred in a neutral tax situation. There are implications in that which I will deal with later. Mr Nords was complaining about the fact that these tax deductions for life assurance premiums had not been increased since 1967. He stated firstly:
Two Government-requested reports on taxation presented in recent weeks have recommended that the maximum allowable deduction be increased.
In another section of his address Mr Nords is reported to have stated:
The Asprey report on taxation had recommended that no upper limit should be placed on the amount allowed as a tax deduction for the payment of life assurance and superannuation.
Mr Norris’s claim simply was not true. The Mathews Committee put as a general recommendation the indexation of personal tax deductions. It passed no judgment on whether a $ 1 ,200 limit was appropriate. There was a blanket recommendation for indexation. The Asprey report, far from stating that no upper limit should be placed on the amount allowed as a taxation deduction for life assurance and superannuation premiums, stated in paragraph 105 of chapter 21 of its report that superannuation deductions for ‘self-employed persons should as now be subject to overall dollar limitation’. So Mr Norris obviously has either little understanding of what was contained in those reports or consciously and deliberately misrepresented the facts. It is a choice between whether Mr Norris is either simply incompetent or deceitful. I regret to state that the only morning newspaper which is published in the city of Perth declined to publish a correction of Mr Norris’s attempt to mislead the public.
One other of the many misrepresentations that have been thrown out by the insurance industry lobby and their stooges in this Parliament and elsewhere was that 10 000 people would lose their jobs in the insurance industry if this Bill were passed. The clear implication of that assertion surely must be that there are 10 000 supernumeraries currently working in the private insurance industry. The Government Insurance Corporation may take business that would have been privately written and presumably the number of employees required would be about the same, but if the Government Corporation was as inefficient and bureaucratic as members of the Opposition would have us believe it will be there would be a greater demand for labour. However, here we have the insurance industry and its stooges claiming that 10 000 workers would be retrenched. Surely the only conclusion one could draw from that is that there are 10 000 supernumeraries who would have to be retrenched if competition from the Government Insurance Corporation forced private insurance companies to operate more efficiently. It is interesting that there seems to be a belief in some quarters that if someone is a salesman or a clerk in a private insurance office he is a highly productive and valuable member of society but if he is a clerk in a government insurance corporation he is a bludger and a supernumerary. I have never been able to follow the logic that produces that sort of conclusion.
Perhaps there is an analogy here which demonstrates the lengths to which the Opposition is willing to go to distort its logic to suit its friends outside this Parliament. I remember that when Medibank was being introduced one of the major objections to Medibank raised by the conservative forces was that it would lead to a gross overuse of medical services since people would no longer be personally responsible for any payment for medical services; they would be completely covered by Medibank. This was dreadful, according to the opponents of Medibank, and we had to stop it. People had to be made to pay 50c as they walked out of the doctor’s surgery otherwise there would be queues half a mile long outside the surgery. We now find that the selfperpetuating oligarchs who run the medical benefits funds, especially in New South Wales, have devised all sorts of schemes under which they can justify their continued existence or make the public believe that their continued existence is justified by offering to cover the 15 per cent gap between the standard Medibank refund and the schedule fee. In other words, these insurance funds are expediting the availability of medical treatment to individuals without direct charge to the patients. Strangely I have not heard a whisper of criticism from the General Practitioners Society, the Australian Medical Association or from any of the people who sit in the Opposition in this Parliament. The old objection to people receiving medical treatment without charge and the rationale behind it seem to have been completely forgotten.
One of the reasons for introducing this Bill was that to the degree that the insurance industry is profitable and particularly to the degree that it is foreign-owned, it is desirable that the government corporation to some extent should supplant the existing operators, especially the foreign operators. But there are other reasons, particularly the desire or need to establish a national interest insurance corporation or an insurance corporation to cover national interest. It is worth noting that the Australian private insurance industry has not got a very good track record when it comes to innovations. For example, the Government was forced by default to establish the Export Payments Insurance Corporation- the Export Finance Insurance Corporation as it is now known- and the Housing Loans Insurance Corporation. Private operators had shown little or no initiative in moving into these areas. Although they are alleged to have shown some initiative in moving into national interest insurance earlier this year, I know that the proposal they put forward is based almost entirely on the New Zealand scheme. It ignores the simple reality that in New Zealand the national government has much greater power over building regulations and safety standards and so on than does the government in a federalist state such as Australia.
The first real reason that the Opposition is opposed to the establishment of the Corporation is purely a very shoddy political one. The Australian Mutual Provident Society has gone into alliance with the National Country Party of Australia with the object of defeating the Labor Government at the next election. I am sure that we all remember how Senator Wheeldon exposed the fact that the AMP had made a shoddy deal with 8 Country Party members of the House of Representatives. Under the terms of that deal the AMP representatives throughout Australia were to act as electoral agents for the Country Party between the present time and the next election campaign. Senator Wheeldon exposed that fact so clearly that the people concerned finally were forced to admit to it, although reluctantly. I suppose since the Country Party has gone into alliance with the AMP and since the AMP has desires to kill this Bill, the Country Party as usual has probably told the Liberal Party what to do. As I understand it, the present Leader of the Liberal Party once leaned towards the establishment of the Corporation and was somewhat in favour of it.
The second reason the Opposition is opposed to the establishment of the Corporation is simple ideological bigotry. Members of the Opposition pose as though they have a boundless faith in the efficiency and justice of the free enterprise system. Yet they have a curious ambivalence about free enterprise. One example to which I have already referred briefly concerns the matter of tax deductions and other preferential tax treatment for life assurance companies. Almost every senator who has spoken from the Opposition side in this debate tonight has said that these concessions should be continued. The reason they should be continued, so they say, is that they will enable a greater flow of funds to be directed into the life insurance industry than would apply in a neutral tax situation. It seems to me that in putting forward that view Senator Carrick and others are repudiating the assertion that Senator Carrick made when he unequivocally rejected the idea- I tried to take his words down accurately; I feel sure that any error is minor- that government knows better than people how they should do things and how they should spend their money.
If Senator Carrick really believes that governments should not pre-empt decisions about the way in which money is to be invested he should oppose the granting of special taxation provisions for life assurance companies. That sort of ambivalence- the difference between the professed faith in the doctrine of free enterprise and the actual political practices that they follow- is by no means confined to Senator Carrick. A very recent example of the contradiction between rhetoric and reality or ideological posturing and policy came from the present Leader of the Federal Opposition. Senator Wright touched on this issue tonight, in agreement with Mr Fraser. Mr Fraser and many others, Senator Wright included, have constantly asserted that superphosphate should be heavily subsidised on the ground that subsidised superphosphate will induce much greater efficiency in agriculture. If superphosphate is not subsidised, the argument goes, farmers will use much less than they should, consequently agricultural efficiency will fall and national income will not be maximised.
Leaving aside the question whether that assertion is correct, the real point, which is relevant to this debate also, is that people who make those sorts of assertions repudiate the central tenet of free enterprise, which is that private entrepreneurs can and do make more sensible management decisions than politicians or government bureaucrats. They expose themselves at the best to a charge of intellectual sloth and at the worst to a charge of hypocrisy on the ground that they support free enterprise, not because they really believe that it provides a more effective mechanism for organising a system of production but because it provides the rationale for an existing, unequal but, for them, advantageous distribution of wealth and income.
Senator Wright seems to be a fearless advocate of government non-involvement in economic affairs. If Senator Wright really believes that I wish he would stand in the Senate tonight or at some other time and advocate that the Government should withdraw its shipping service to Tasmania, that that is an area which the Government should abdicate and leave entirely to private enterprise. Senator Wright, as a senator representing Tasmania, no doubt would be happy to accept the consequential higher freight rates which would be imposed if the Government should withdraw.
Whether the Government should or should not be involved in the economy, whether it should operate a shipping service to Tasmania, or whether it should sponsor the Australian Government Insurance Corporation are matters of subjective value judgment that are not subjective to any scientific proof. I am amazed at the amount of heat which can be generated in opposition to the attempt to establish a government insurance corporation or in opposition to any other decision of that nature. Granted that the decision to expand public ownership or public participation usually rests on the sort of subjective value judgment to which I have referred, a decision, once made, is not irreversible. There are numerous examples in Australia of government trading enterprises which have been sold or closed. Even in the UK the fully nationalised steel industry was de-nationalised in the 1 950s. Although the Opposition spokesman claim that the Australian Government Insurance Corporation will have unlimited money available to it under the provisions of the Bill, the fact is that the Corporation will have only those amounts of money available to it which may be appropriated by the Parliament from time to time. In other words, its finance will be completely under the control of the Parliament. I do not see why the Opposition should object to that fact particularly. Nor do I see why it should become so hysterical over a decision with which it may disagree but which, whether it is right or wrong, can subsequently be reversed anyway.
There is a situation with which to contrast this situation. Neither the several hundred Australian conscripts who were killed in Vietnam or the Vietnamese killed by them could be resurrected by a subsequent decision by the Australian electorate that our involvement was foolish, or by the subsequent disclosure that our involvement was predicated on a series of lies sanctioned or concocted by the government of the day. I find it ironic, to say the least, that people who oppose the extension of public ownership with quasireligious zeal very strongly tend to be the same people who were eager to maintain the premium on what they call our insurance policy with the United States, when the premium in question was someone else’s life or someone else’s physical liberty. I commend the Bill.
– I find myself very much at variance with the attitudes expressed by Senator Walsh. I am absolutely opposed to the proposal that the Commonwealth Government establish a government insurance corporation. My opposition stems from my deeply held conviction that governments should not enter into fields of trade, commerce and industry which can be and are adequately catered for by private enterprise. In my estimation the basic role of government in respect to trade, commerce and industry is to provide the legislative framework within which economic activity can operate freely, having due regard to the rights of others and to the provision of such basic utilities as power, water supply, roads and railways which are beyond the capacity of free enterprise to provide. When governments go beyond providing the climate and framework for production, the experience, on a world viewing, is that there has been economic regression. I challenge any honourable senator here to suggest that in such circumstances a really progressive situation has arisen in any part of the world, particularly in the Western world, over a period of time. Where there has been undue intrusion by government there has been a lack of initiative and drive and enthusiasm, with the result that maximum efficiency is never attained.
The whole community benefits from a zestful, buoyant economy in which everyone who is eager to do so is encouraged to give of his or her best. They are rewarded for their enthusiasm, their ingenuity and their effort. In short, I believe in free enterprise. I am very much opposed to policies of nationalisation and socialism which are impersonal.
– What about the South Australian Electricity Trust?
– I said a moment ago that I was in accord with the framework provided by government for power supply. I pay great tribute to that which has been done by the Trust in South Australia in the provision of power. I regard that as one of the major basic utilities which governments can well provide.
– We had to take that over from private enterprise.
– I am well aware of the whole background of the matter. But in South Australia we have a system of power supply and generation -
The DEPUTY PRESIDENT (Senator David son-Order! I think the Senate is discussing the Australian Government Insurance Corporation and it is not necessarily involved with the South Australian Electricity Trust.
– The proposal before us is in conformity with this Government’s policy of promoting public enterprise as widely and as quickly as it can. In my opinion, the Government does not express the real Australian character which has always been one of rugged individualism and self-reliance but with proper concern for a fair go for everyone. With this concept uppermost in my mind, I fail to understand why the Government seeks to enter the insurance field. Recent public opinion polls confirm that a clear majority of Australians do not consider insurance to be a proper area of Australian Government activity. At the present time the Government is battling to overcome a rising deficit situation and looking for avenues for curtailing governmental outlays. Why then, I ask, expand its public expenditures to finance an insurance enterprise when we have existent an excellent system through the whole gamut of insurance apart from the provision of national disaster insurance, which is an area for which with government-private enterprise co-operation an authority could well be set up under the direction or management of free enterprise to meet the insurance requirements arising from possible national disasters?
– What about third party insurance in South Australia? If it were not for government insurance, people could no drive a motor car in South Australia now.
– I am discussing at this moment the setting up by this Government of an insurance corporation. The cost of setting up the Australian Government Insurance Corporation will in itself exceed the planned initial capital cost of $800,000. The cost of the necessary office systems and computers alone could well exceed that figure. One has to have the experience in business of getting an office off the ground to realise the very high capital cost involved in establishing an industry and getting it moving. An amount of $800,000 which I expect is in the minds of those who are now in favour of the formation of this Corporation would be peanuts when it came to providing services which must be provided by an insurance corporation.
The authorised capital figure alone reveals to me that no proper feasibility studies have been carried out which would have enabled the true costs and probable benefits to be assessed. I recall asking the Minister for Social Security and Minister for Repatriation and Compensation (Senator Wheeldon) how he could justify his claim that this proposed corporation could take on re-insurance business with the capital with which it is to be provided. How could it enter into a field of insurance which, on experience in the insurance world, requires an enormous amount of capital backing to enable an insurance company to take over such risks as were mentioned before by Senator Jessop- the huge losses in Darwin as a result of Cyclone Tracy? The reinsurance there amounted to an enormous amount of money. Had that insurance been held by an organisation such as is now proposed to be established, that insurance in itself would have meant immediate fantastic demands on Treasury and on the taxpayer.
The obvious lack, in my opinion, of a proper assessment of the cost of establishing such an organisation as this, able to take on re-insurance and the like, would indicate that this matter has not been given the full consideration it well may have been given before the suggestions to have this organisation set up came down to us. I understand that the Life Insurance Commissioner has estimated that if the Australian Government Insurance Corporation as proposed were to obtain only one per cent of new ordinary insurance, it would require a fund of $ 1 8m. The assets of the existing insurance companies and superannuation funds total at the present time about $ 15,000m. These funds are invested in a wide variety of activities on behalf of millions of policy holders and superannuation fund members. The disruption to private industry which provides jobs should the present system of provision of insurance be varied and the private sector be denied the ability to be the source of funds which it now is would create, in my opinion, havoc- real chaos- in the economy.
I was impressed by an editorial which appeared in the Melbourne ‘Age’ on 1 5 May of this year which seems to sum up the situation admirably in respect of the proposed Australian Government Insurance Corporation. The editorial read as follows:
I completely endorse that balanced and responsible reference to the proposal which is before us and I oppose the Bill absolutely.
– This has been a long debate and I dare say a futile debate because even though the Government has the arguments it will not have the numbers by the sound of the Opposition’s line. It is somewhat unfortunate that despite the fact that more Australians want the Australian Government Insurance Corporation than do not- the surveys reveal that- the Opposition will defeat this legislation. The interesting point about the debate is the difficulty of reconciling the stated attitude of members of the Opposition with what I understand to be the platform of the Liberal Party of Australia. But I will say more on that in a moment.
Over the last 10 to 15 years there have been many new insurance companies formed in Australia. Although I have endeavoured to find out, I am not aware that any of the established companies complained or objected, much less conducted an hysterical campaign against their introduction into Australia at that time. But as soon as the Australian Government decides to introduce the legislation to establish a Government Insurance Corporation there is an outcry against it. This happened, of course, despite the fact that over the years successive Liberal Party governments in New South Wales and Victoria have not seen fit to disband the State government insurance offices in those States. The same applied in Tasmania when the Liberal Government for a very short period was in office from 1969 to 1972. It also took no steps whatsoever to disband its State office. This has happened despite the fact that the government offices are in quite active competition with the private sector. Of course, the reason they did not disband them was that they realised that the insurance facilities available to them through the State instrumentality are of very great use. I can speak with some experience on this. It is much better for them to have that State instrumentality available to the State government irrespective of what political party happens to be in power.
The Liberal Party has had quite an argument over this Bill. Certain sections of the Liberal Party strongly supported this legislation but there were other sections that strongly opposed it. But there is no doubt that there were and still remain deep divisions within the Liberal Party over this legislation. It is true that the National Country Party of Australia, as I understand it, seems to be unanimously opposed to the legislation despite the fact that the Government wants to introduce crop insurance for the farming community, something that is sorely needed in this country and which is provided in many overseas countries. It is only a major government underwritten body such as the Australian Government Insurance Corporation which could take on that type of insurance because -
– We have crop insurance available at the present time.
-But not the sort of crop insurance which has been envisaged in the investigations by the Government. The same applies with respect to natural disasters. It is true that there are certain forms of underwriting which it is difficult for an insurance company to take on because there is not a profit in that form of insurance. But profitability should not be the sole objective to the exclusion of the interests of the community. This is where insurance, and banking and many other fields take on a more important and more definitive role than we find in other sections of industry, business and commerce.
Why has there been this disruption or eruption in the Liberal Party over this issue? I went to the Liberal Party platform to try to find out just exactly what its attitudes are to this whole philosophy of government being involved in the insurance industry. I want to repeat that the basic argument on the Opposition side seems to be that it does not mind competition; it objects only to government competition. The Opposition does not want the government to interfere. This has been stated as a recurring theme by many speakers on the Opposition side. I had a look at the current Liberal Party platform. There were a couple of extracts which I found interesting. The first one appears on page 58, paragraph 3, which says:
The use of long term economic planning to provide guidelines for the achievement of national objectives and to reduce uncertainty about the likely course of the economy.
That seems to me to be almost a direct lift-out from the Labor Party’s platform. I have no great argument with what is stated there, but we have heard so much tonight about creeping socialism. I think it was Senator Wright who said that the Government would like to nationalise the industry but it is going to come in through the back door. In fact that paragraph I have just quoted comes from the Liberal Party’s platform and it is quite a worthy objective. It is somewhat similar to what one would find in the Labor Party’s platform. It would seem that this creeping socialism that we hear so much of has now crept into the Liberal Party.
– I did not mention socialism in my speech.
-With great respect I listened to Senator Wright’s speech. I was not in the chamber but I was in my office listening to his speech. We know the sort of emotional story that he always puts up. He loves to hand it out but as soon as he gets a little serve back he finds it very difficult to sit and take it. That has always been his style. On page 61 of the Liberal Party’s platform we find this interesting clause- again clause 3:
The establishment of a mandatory requirement for majority Australia ownership in key areas of the economy where-
there is a valid argument for public ownership as, for example, in the case of public utilities;
c) strategic interests are involved .
I am not quite sure what is meant by ‘strategic interests’. It could have any number of meanings. I would assume that it means the strategic interests of the philosophy of the Liberal Party and that would be something open to it to use at any time should it ever wish to do so. However, that is not so important. The important point is the recognition within the Liberal Party platform of the need for public ownership which again is something that I do not particularly argue against, but it seems to be so contrary to the line that has been taken here by the Opposition in the course of debate. On page 4 of the Liberal Party’s platform we find another interesting extract which says:
Liberalism . . . acknowledges the importance of effective competition as a preventive of the defects of monopoly power and as the incentive to creativity and productivity.
It recognises, too, the right and obligation of the State-
That is, the Government-
To intervene to ensure effective national development, to preserve and conserve’ the environment and its resources, to stimulate competition arid to achieve equity . . .
I cannot for the life of me understand the line of argument that has been taken here tonight by members of the Opposition. It is in direct conflict with this section of their own platform. Of course they recognise the need for the Government to intervene to stimulate competition. If they do not believe that why is it in their platform? Why is it they are promoting public ownership when they see the need arising? The important point, of course, is that it is a difference of degree, not of principle. The recognition is there. Yet the Liberal Party will tell us that by bringing down this legislation we are taking some terrible step which would undermine fairness and equality in the Australian community; but in fact the members of the Opposition will when it suits them subscribe to these very principles themselves. I have no doubt that they would use them at any time if they ever have the opportunity again. They will use them to ensure that whatever methods are used, whatever objectives they wish to seek will be taken as part of their policy and they will not hesitate to intervene as a government to do whatever these things are that are contained within their own platform. It is hypocrisy to base an argument against this legislation on intervention by this Government to stimulate competition. It is in the Liberal Party’s own platform. It recognises the need for it. I am quite sure that members of the Liberal Party were hoping that no one would find that out.
Only very recently the Commonwealth Bank decided to enter the hire purchase area of service to its own customers. Was there any great outcry about that? Was anyone suggesting that the Government was using the Commonwealth Bank as a backdoor method of nationalising the hire purchase companies? Of course not. People realise that the Commonwealth Bank, as a commercial operation, is entitled to provide the services to its customers which it considers necessary. Of course, in the normal commercial sense today that is commonly practised even within the insurance industry itself, where there has been a great diversification of the forms of service provided to customers. There are the sorts of moves which any commercial operation, whether private or government, is entitled to make.
It is quite apparent that the arguments which have been used against this legislation do not stand up to investigation. The insurance industry should not be seen purely as an organised profit motive industry. It has a service to give to the community. I believe that many private insurance companies do that. They do it fairly. They do not rob their customers. There are some, I think, that do so, but there are some good insurance companies that play the game. It is ludicrous to suggest after the Government told the Austraiian people on 3 occasions at 3 elections that it would introduce legislation to establish a government insurance office, that this legislation should be rejected. I seek leave to continue my remarks later.
Leave granted; debate adjourned.
Motion (by Senator Wriedt)- by leaveagreed to:
That consideration of the Advance to the TreasurerStatement for the year 1 974-75 of Heads of Expenditure and the amounts charged thereto pursuant to section 36a of the Audit Act 1901-1973- be made an order of the day for the next day of sitting.
Bill received from the House of Representatives.
Ordered that the Bill may be taken through all its stages without delay.
Bill (on motion by Senator Douglas McClelland) read a first time.
That the Bill be now read a second time.
This Bill is identical to the Electoral Bill 1975 which was passed by the House of Representatives on 13 February 1975 and was then introduced into the Senate on 18 February 1975. The motion for the second reading of the Bill was defeated in this chamber on 25 February 1975. The proposals contained in this Bill were widely debated in this chamber in February 1975 and I do not propose to go over the same ground on this occasion. Rather, I shall confine my remarks to one or two observations which are pertinent to the Bill.
As all honourable senator are aware, the existing provisions relating to electoral expenditure are totally inadequate and impose quite unrealistic limitations upon the expenditure by candidates. On the other hand, there is no existing provision in the Commonwealth Electoral Act which limits electoral expenditure by political parties. The Government therefore considers that a restructuring of the expenditure provisions into sensible, more realistic and workable legislation is long overdue.
In simple terms, this Bill, in addition to making adequate provision for the limitation of electoral expenditure, also provides for the disclosure of sources of funds made available to parties and candidates. This practice is followed in the United States and Canada, and was introduced in those countries by conservative governments with the support of all major political parties. The Government believes that the proposed legislation does not discriminate in favour of, or against, the legitimate interests of any party.
Over 3 months have elapsed since the Senate refused a Second Reading to the Electoral Bill 1975, a most important measure which the Government has reintroduced and intends to pursue. I commend the Bill to the Senate.
Debate (on motion by Senator Withers) adjourned.
Motion (by Senator Douglas McClelland) proposed:
That the Senate do now adjourn.
– I rise to raise briefly a question that has been of concern and distress to some of my constituents and which they want placed on public record to correct a misunderstanding. The matter has been brought to the attention of Senator Wheeldon, who assured me that he would be in the House to respond during the adjournment debate tonight.
Last Saturday the Australian Broadcasting Commission ran a program called Innovations at 8 a.m. on which were discussed matters concerning the National Acoustic Laboratories, the testing of hearing, some limitations and some criticisms of the Laboratories. The Minister for Health (Dr Everingham) took part. Some of the criticisms concerned an investigation being carried out in Australia at the present time into the needs of hearing, the testing of hearing and the prescribing of hearing aids. It concerned a working party which has been set up in the Department of Health from within the Department to examine some of the matters. This working party has carried out a study. It consisted of the First Assistant Deputy Director, a clerical assistant and some representatives from the National Acoustic Laboratories. There were no representatives from the industry or from the professions involved in audiology.
The report has gone to the Director-General of Health and to the Minister for Health and at the present time is awaiting Cabinet attention. I understand that people in the industry welcome the concept of the investigation but have criticisms about the way in which it was set up and the way in which the report is being handled. Those are the facts surrounding the program which was run, on which Dr Everingham spoke and answered some of the criticisms. In speaking on the program the Minister had 2 things to say: First, that he would like to have heard from audiologists and others in the profession, and second, that he had not heard from people in the profession and that no one seemed to be worried. It was on this point that my constituents raised their concern.
I have heard the tape of the relevant part of the Minister’s statement and I have the transcript in front of me. It is worth quoting exactly what the Minister said in response to a question from the interviewer. Referring to one of his critics, he said:
He wants the ear, nose and throat specialists, the audiologists and a number of other independent organisations to be represented on this body. Well, why aren’t they asking for an independent body? It seems to me they’re quite content.
The Minister was in fact referring to the study which is being conducted, which contained no representatives from the people who carry out the testing of hearing or the prescribing of hearing aids. Unfortunately the Minister was not correct in making the assertion either than he has not heard from the industry or that it is not concerned. I have here a letter written by a group of clinical audiologists. I believe that the letter is in the Minister’s possession at present. I seek leave to have the letter incorporated in Hansard.
The ACTING DEPUTY PRESIDENT (Senator Davidson)- Is leave granted? There being no objection, leave is granted. (The document read as follows)-
Room 7, 6th Floor, The North Shore Medical Centre, 66 Pacific Highway, ST LEONARDS, N.S.W. 2065. 23rd April, 1975.
The Minister for Health, Parliament House, CANBERRA, A.C.T. 2600
Certain information concerning the proposed extension of hearing aid services has been drawn to our attention. We the undersigned, have been requested by a group of audiologists who are working in hospital, clinical and academic settings, to represent to you their deep concern at various aspects and implications of this scheme as we understand it.
The Australian Labor Party’s expressed policy that the enjoyment of the highest attainable standard of health is a fundamental right of every citizen is particularly applicable to meeting the needs of the hearing impaired from initial diagnosis through all aspects of habitation and rehabilitation. We as professional people presently concerned with the audiological needs of the whole community, including the group covered by the suggested extensions, do not believe that the present proposals as we understand them will adequately meet the requirements for total hearing care.
From consumer dissatisfaction expressed to us, the standard of service provided by the National Acoustic Laboratories to those presently in their care must be open to question. We are also aware of limitations in the service provided the rest of the community by the hearing aid industry. We therefore feel that a wider investigation is mandatory, in order to develop the most appropriate and efficient delivery of this important and audiological service, and that the proposals as they presently stand will represent a backward step rather than progress towards a better standard of hearing health care in this country.
Independent audiologists who include the most experienced and most academically qualified professionals in this country, are anxious to have the opportunity to contribute to such an enquiry, and to help in any way possible to ensure its successful outcome. We are aware of other interested groups whose contributions we consider should be heard.
We are disturbed that information of such importance should have reached us only indirectly, and when it has become a matter of considerable urgency. We hope we may hear from you directly at this time.
Brian Harold, PhD.
Clinical Audiologists c.cMrG. C. Lloyd c.c. MrD. Chipp
I draw attention only to several points in this letter. Firstly, it was written in April and addressed to the Minister for Health; secondly, it applauded the principle of the inquiry; but thirdly, it stated in the third paragraph:
We are also aware of limitations in the service provided the rest of the community by the hearing aid industry. We therefore feel that a wider investigation is mandatory, in order to develop the most appropriate and efficient delivery of this important audiological service, and that the proposals as they presently stand will represent a backward step. . . .
The letter is signed by a group of 5 clinical audiologists. What concerns them is that they believe that their representations have been ignored totally. They believe that the Minister’s statements on the radio were quite incorrect, that they represent a slip of the memory, perhaps carelessness on his part, and that audiologists are entitled to some recognition. They have approached the Department and raised their concern about the study being carried out. They have indicated their desire to be involved in the investigation of health care. In fact, I have been told by these clinical audiologists that they feel that what is required is a broad survey by a multi-disciplinary group, not just by the Department of Health, to examine the situation with regard to hearing problems in Australia, their extent, their seriousness, the amount of research that is needed and the amount of data collection that is required. The audiologists believe that the Department has not carried out such a study and that it cannot be carried out unless they are involved.
They as professionals have expressed their dissatisfaction, and they are most concerned that in the radio discussion the Minister should not have recognised the fact that there is dissatisfaction and that in fact there is some basis for the criticism of the study being carried out by his Department. I ask only that the Minister for Health acknowledge that his comments on radio were incorrect, at least as they applied to clinical audiologists, who have tried to become involved in the present problems, who are interested and who do not want to be ignored or scorned when the Department draws up its proposals.
- Mr Deputy President, I learned of this matter this evening and I have obtained some documents from the office of Dr Everingham, including a transcript of a discussion which took place in an Australian Broadcasting Commission radio program which was recorded on Thursday, 14 August and broadcast on Saturday, 16 August. In that broadcast somebody interviewed a Mr Carr of the Hearing Aid Council, which is apparently an organisation of private manufacturers of hearing aids, and Dr Everingham. A number of exchanges seem to have taken place between the participants on an issue which arouses rather more controversy than I had hitherto been aware of. During the course of the discussion Mr Carrsuggested that in some way Dr Everingham had not behaved properly in that he was suppressing a secret report. I gather that Mr Can has been making very grave allegations against a Dr de Souza and a Mr Piesse of the Department of Health, who were alleged to be engaging in intrigues of some kind. They deny that, and the Minister for Health (Dr Everingham), has said that he has full confidence in them and that, far from keeping secret the report of these people in order in some way to damage the members of the Hearing Aid Council, he has not published the report at the request of some members of the industry.
– We might bring them before the Senate.
– I would not want to do that. I can only repeat the information that has been provided to me. Apparently a request was made to the Minister for Health that the result of the inquiries by Dr de Souza and Mr Piesse should not be made public. The Minister acceded to that request and is now being accused by Mr Carr of having deliberately suppressed the report. During the course of the interview Dr Everingham said that he had not received any official request for anybody else to participate in the inquiry. Is this not so?
– Not quite.
-Anyway, I think he said that he had not received any request. He meant by that no official request, as I understand it. In fact, there is no record of any request having been received in his office when my office contacted his office tonight about any request from anybody to participate in this inquiry. Senator Baume has provided me with a copy of a letter written by 5 clinical audiologists to the Minister for Health on 23 April in which they requested the opportunity of taking part in the inquiry. I do not know whether this letter has been received by the Minister, whether some error occurred or whether, in fact, the Minister did not take this as being an official request. I am not quite sure what an official request is. As far as
I can tell from the letter, these audiologists appear to be writing on their own behalf and not representing any organisation. It seems to be a letter from 5 individuals, four of whom hold the degree of Master of Arts and one the degree of Doctor of Philosophy. The only observation I was able to make from the letter was that the sexist nature of our society seems to have been continued in this letter in that the highest degree was held by the one male member of the group. Apparently this letter was not taken as an official request, if it were received by Dr Everingham. I shall see that the remarks of Senator Baume are passed on to the Minister for Health. If he has not received this letter I shall see that it is drawn to his attention that such a letter has apparently been sent or, at any rate, written. I shall ask him to look into the matter.
– The interest of these people in continuing.
-Yes. I shall ask Dr Everingham to see that an appropriate reply is given to the 5 clinical audiologists who wrote to him. I trust that will satisfy Senator Baume.
Question resolved in the affirmative.
Senate adjourned at 10.57 p.m.
The following answers to questions were circulated:
asked the Minister representing the Minister for Urban and Regional Development, upon notice:
– The answer to the honourable senator ‘s question is as follows:
It should be noted in considering this reply that from March 1974 to March 197S Local Government Employment increased by 1 1.4 per cent which was a faster rate than the Australian Government rate of 4.8 per cent and State Government rate of 6.4 per cent. The local government figure does however, significantly reflect the operation of the Regional Employment Development Scheme.
asked the Minister for Agriculture, upon notice:
– The answer to the honourable senator’s question is as follows:
For comparison year by year, the figures given are for those males not less than 35ft in length (the legal length limit up to and including 1972).
The above includes small females taken for research purposes in some years, as follows:
There was also a special permit catch of 83 females in 1972. The legal minimum size was reduced from 35ft to 30ft in 1973.
asked the Minister for Agriculture, upon notice:
– The answer to the honourable senator’s question is as follows:
Female whales are not included because until recently their catch has been restricted through strict observance of the legal minimum length.
Cite as: Australia, Senate, Debates, 20 August 1975, viewed 22 October 2017, <http://historichansard.net/senate/1975/19750820_senate_29_s65/>.